GSI Commerce Inc. has agreed to acquire Innotrac Corp, an e-commerce fulfillment provider based in Duluth, GA. GSI, based in King of Prussia, PA, will pay $52 million in cash and stock and assume $9.9 million in debt. Innotrac had net debt of $9.9 million, making the aggregate value of the transaction $61.9 million.
The boards of directors for both companies have approved the purchase, which is expected to close in the first half of 2009. The acquisition is expected to be accretive to financial results in 2009.
GSI said the purchase will boost its client base and expand its North American operations.
In particular, GSI plans to capitalize on Innotrac’s seven fulfillment facilities in Georgia, Illinois, Kentucky, Nevada and Ohio, and one customer service center in Colorado, as part of a plan to more efficiently deliver packages regionally.
With the acquisition, GSI will manage 4.7 million square feet of fulfillment centers and 2,165 call center seats. GSI intends to use Innoctacs Nevada-based fulfillment center to offer regional fulfillment services starting next year.
Innotrac’s retail clients accounted for the largest portion of the companys 2007 sales. They include Target Corp., Ann Taylor, and Smith & Hawken. In March of this year, it reached a multi-year agreement to provide e-commerce fulfillment services for The North Face to support the expansion of the outdoor brand’s e-commerce initiative set to launch later this year.
For the 12 months ending June 30 Innotrac posted net revenues of $128.2 million, operating income of $4.5 million and non-GAAP income from operations of $9.1 million.
