- Company's focus is on AI, retail media, and peers
- It targets France, North America, Japan, and Australia
- IPO on the horizon for 2025-26
French online marketplace solutions provider Mirakl is in discussions with several targets, with at least one acquisition expected to be executed in 2024, co-founder and co-CEO Adrien Nussenbaum told Mergermarket.
The Paris-based company has five clearance stages to carry out before an acquisition and the most advanced talks are at stage three, the executive said, adding that it was unlikely for a deal to be completed this year.
Mirakl, which registered EUR 135m annual recurring revenue (ARR) in 2022, is focusing on three main themes for its M&A strategy, the first one being artificial intelligence (AI)-related products such as Octobat, an invoice compliance specialist it acquired back in 2021 and an AI platform publisher for boosting customer conversion and performance Target2Sell, which it bought last year, he said.
Mirakl would also target retail media to expand its footprint as a platform provider used both by traditional brands (first-party or 1P) and third-party sellers (3P), Nussenbaum said. It also plans to consolidate its leadership in its core business by acquiring peers, he added.
The marketplace provider will look into France and nearby countries for potential acquisitions related to improving its tech product, as well as North America, Europe, Japan, and Australia to consolidate its market share, the co-founder said.
Mirakl has a three-person-internal M&A team led by chief strategy officer Shahadat Hasann, he said. It is also regularly in touch with external advisory firms without having mandated any and receives at least one deal opportunity per day, he said.
For Target2Sell, 200 companies were audited by the company before the final target was chosen, he said, adding that there is a strong attachment to its product at Mirakl and the company leads very detail-oriented audits, which creates some latency compared to market key players’ expectations.
Securing M&A funding
Regarding the size of potential targets, Mirakl does not have an upper limit, although there are not many large deals in e-retailing at the moment, he said, adding that it will however not consider a company with a flat growth pattern. Mirakl could find a great opportunity valued at EUR 1m but could also fund the acquisition of a target valued several hundreds of millions, he added.
Potential deals will be financed through cash or debt, he said. In August, the company announced it secured a EUR 100m revolving credit facility (RCF) from a banking consortium composed of BNP Paribas, HSBC, JP Morgan, Natixis and Société Générale, as per an official press release.
Mirakl, which has a “very healthy” balance sheet and some maturity on the tech market, has attracted interest from banks, he said. Mirakl opted for the RCF as it is non-dilutive and has a lower cost than traditional debt funding, he added. The additional EUR 100m enables Mirakl to invest quickly in peers with qualitative products but struggling to fund themselves, he said.
The marketplace expert was always close to breaking even until 2021 when the pandemic boosted the marketplace model with a return to normalcy last year. Mirakl is currently breaking even in his core business and plans to be entirely profitable by 2024-25, he said.
The company has “more than enough” cash to operate over the next few years, Nussenbaum said, adding that the company would only need more funding if it opted for an acquisition of more than EUR 100m and would then focus on non-dilutive solutions.
This February, CFO Eric Heurtaux told this news service that Mirakl had “not slowed down” when preparing for a potential listing and was still discussing its listing with several potential advisors although none were mandated.
When asked about Mirakl’s IPO prospects, Nussenbaum said that the company still has not mandated advisors. It kicked off an IPO readiness internal program in 2021 when it secured USD 555m during a Series E led by Silver Lake, he said.
Mirakl has since then been working on upgrading its financial reporting and environmental, social and governance (ESG) standards ahead of a potential listing but plans to keep the reins of its growth strategy for now, he added.
French tech unicorns in the likes of Mirakl are obvious IPO candidates. Still, given the current market conditions - with inflation and decreasing tech valuations, they would rather wait or could decide to list at a discount compared to the high valuations at which they raised equity, a sector banker following the situation said.
As long as market conditions do not improve, Mirakl will not consider an IPO as the management does not want to head a company that could stagnate after listing, Nussenbaum said. It plans to have reached certain sales milestones before going public which it projects to attain by 2025-2026, he added.
Mirakl has a score of 48, according to Mergermarket's Likely to Exit (LTE) predictive algorithm.* This score is heavily weighted to the company's valuation.
French provider of sustainability rating EcoVadis is another French tech company that is pencilled in on the IPO pipeline for 2025-26. This September, co-founder and co-CEO Frédéric Trinel told this news service that EcoVadis has been working with Eight Advisory on an IPO readiness program ahead of a possible IPO in New York in the next two to three years, as reported.
*Mergermarket's LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.
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