3 January 2019 www.capstoneheadwaters.com Capstone Headwaters The E-commerce & Internet Retailing market has experienced heightened traffic, increasing 14.5% year-over-year (YOY) through Q3 2018, according to the US Census Bureau. 1 The positive correlation between rising real disposable income and e-commerce sales has fostered significant growth and expansionary opportunities in the industry. Healthy consumer confidence and wage growth throughout the year, most recently indicating a 3.2% wage increase in the December US jobs report, 2 have resulted in personal consumption expenditure growth of 2.8% YOY in November (US Census Bureau). 3 Heading into 2019, an unabated US economy is poised to bolster consumer spending growth and subsequently present acquisition opportunities for leading retailers to acquire e-commerce businesses in an effort to capture market share. With 103 transactions in 2018, the E-commerce & Internet Retailing merger & acquisition (M&A) market is expected to remain active in 2019. The Home Furniture and Decor segment showed value-add M&A opportunities, as consumers shift preferences to purchase furniture and home related goods online. Notably, Walker Edison Furniture, a manufacturer of read-to-assemble furniture, was acquired by JW Childs Associates in September (terms undisclosed). In addition, Stitch Industries (doing business as Joybird), an e- commerce retailer and manufacturer of upholstered furniture, was acquired by La-Z-Boy (NYSE:LZB) in July for a transaction value of $67.5 million. TABLE OF CONTENTS Year-in-Review Key Trends & Drivers Notable Transactions Case Study Select Transactions Firm Track Record E-Commerce & Internet Retailing Q1 2019 YEAR-IN-REVIEW CONTRIBUTORS Lisa Tolliver Director 312-674-4532 [email protected]$133.1 $449.3 $380.7 $75 $150 $225 $300 $375 $450 $525 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q3 2018 $ in Billions YTD Q3 Q4 US E-Commerce Sales Source: US Census Bureau
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3January 2019www.capstoneheadwaters.com
Capstone Headwaters
The E-commerce & Internet Retailing market has experienced heightened
traffic, increasing 14.5% year-over-year (YOY) through Q3 2018, according to
the US Census Bureau.1 The positive correlation between rising real disposable
income and e-commerce sales has fostered significant growth and expansionary
opportunities in the industry. Healthy consumer confidence and wage growth
throughout the year, most recently indicating a 3.2% wage increase in the
December US jobs report,2 have resulted in personal consumption expenditure
growth of 2.8% YOY in November (US Census Bureau).3 Heading into 2019, an
unabated US economy is poised to bolster consumer spending growth and
subsequently present acquisition opportunities for leading retailers to acquire
e-commerce businesses in an effort to capture market share.
With 103 transactions in 2018, the E-commerce & Internet Retailing merger &
acquisition (M&A) market is expected to remain active in 2019. The Home
Furniture and Decor segment showed value-add M&A opportunities, as
consumers shift preferences to purchase furniture and home related goods
online. Notably, Walker Edison Furniture, a manufacturer of read-to-assemble
furniture, was acquired by JW Childs Associates in September (terms
undisclosed). In addition, Stitch Industries (doing business as Joybird), an e-
commerce retailer and manufacturer of upholstered furniture, was acquired by
La-Z-Boy (NYSE:LZB) in July for a transaction value of $67.5 million.
Lisa has over 18 years of experience in the investment banking industry, primarily focused on advisingmiddle market private business owners in liquidity related transactions. As a Director based in CapstoneHeadwater’s Chicago office, she works closely with clients to advise and execute domestic and cross-border M&A transactions, recapitalizations and capital raises.
Prior to Capstone Headwaters, Lisa worked in the Capital Strategies Group at Morgan Stanley SmithBarney and also spent 10 years working for the middle market investment banking arm of Citigroup,where she was involved in the evaluation, marketing and closing of numerous transactions involvingprivate businesses and corporate divestitures. Over her career, Lisa has developed M&A expertise inseveral industry sectors including consumer products, e-commerce, technology-enabled businessservices, government & defense and industrials. Lisa received her BA on academic scholarship fromIllinois State University and is a Series 7 and 63 Registered Securities Representative.
E-Commerce & Internet Retailing | Q1 2019
Capstone Headwaters has a fully dedicated Consumer & Retail Team that has earned the reputation as a trusted advisor for
some of the most recognized companies across the consumer and retail landscape. What sets us apart is our experience.
Each of our Managing Directors has been focused on Consumer & Retail for over 20 years. Our collective tenure and
experience brings deep sector knowledge and insights to identify valuation drivers and company positioning. We have
established relationships with thought leaders, private equity, consumer and retail focused family offices and other key
industry participants. For more than 15 years, we have delivered award-winning results.
To learn more about the Consumer & Retail Team and our most recent M&A Transactions visit www.capstoneheadwaters.com
MIDDLE MARKET INVESTMENT BANK OF THE YEAR
2017
US - DEBT FINANCING ADVISORY OF THE YEAR
2018
US MIDDLE MARKETS INVESTMENT BANK OF THE YEAR
2018
INVESTMENT BANKING FIRM OF THE YEAR
2019
TURNAROUND AWARDS
1. US Census Bureau, “Quarterly Retail E-Commerce Sales 3rd Quarter 2018,” https://www.census.gov/retail/mrts/www
/data/pdf/ec_current.pdfhttps://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf, accessed January 10, 2019.
2. Bureau of Labor Statistics, “Employment Situation Summary,” https://www.bls.gov/news.release/empsit.nr0.htm, accessed
January 10, 2019.
3. Bureau of Economic Analysis, “Monthly Personal Income, DPI, PCE and Personal Saving: Levels and Percent Changes,”
https://www.bea.gov/system/files/2018-12/pi1118_hist.pdf, accessed January 10, 2019.
4. Mastercard, “Mastercard SpendingPulse: U.S. Retail Sales Grew 5.1 Percent This Holiday Season,” https://newsroom.
Disclosure: This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisi-
tion activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any reference to or omission of
any reference to any company in this report should not be construed as a recommendation to buy, sell or take any other action with respect to any security of
any such company. We are not soliciting any action with respect to any security or company based on this report. The report is published solely for the
general information of clients and friends of Capstone Headwaters. It does not take into account the particular investment objectives, financial situation or
needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all
investors. This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied
upon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to vary
mate- rially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are
subject to change without notice. Additional information is available upon request. The companies mentioned in this report may be clients of Capstone
Headwaters. The decisions to include any company in this report is unrelated in all respects to any service that Capstone Headwaters may provide to such
company. This report may not be copied or reproduced in any form, or redistributed without the prior written consent of Capstone Headwaters. The
information contained herein should not be construed as legal advice.
Capstone Headwaters is an elite investment banking firm dedicated to serving the corporate finance needs of middle market
business owners, investors and creditors. Capstone Headwaters provides merger & acquisition, private placement, corporate
restructuring and financial advisory services across 16 industry verticals to meet the life cycle needs of emerging enterprises.
Headquartered in Boston, MA and Denver, CO, Capstone Headwaters has 19 offices in the US, UK and Brazil with a globalreach that includes over 300 professionals in 33 countries.
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