Congratulations: Moonpig to snap up gifting group Buyagift in £124m deal

Greetings card giant Moonpig Group (Moonpig) has announced the proposed acquisition of Buyagift, the gift experiences platform, for £124m.

The acquisition accelerates Moonpig’s strategy of becoming a leader in the gifting market, and gives them entry into the £6bn experiences segment.

Buyagift is the UK’s leading gift experiences platform with the number one and number three brands in the sector, Buyagift and Red Letter Days.

Moonpig’s share price was boosted as high as 10 per cent yesterday afternoon.

After opening at 246.2 pence, the price rose to a high of 268 pence yesterday morning, after news of the takeover.

The company offers its 3m customers the broadest range of experiences across the UK, with over 4,400 partners across categories including short stays, theatre and family days out.

Last year, it posted revenues of £44m, with an EBITDA of £14m with a cash conversion rate of over 100 per cent.

The transaction will triple Moonpig’s gifting range immediately, with no inventory.

Meanwhile, Moonpig will apply its data and technology capabilities to the Buyagift brands to accelerate growth

As a result of the acquisition, Moonpig now expects revenue for the enlarged Moonpig Group in its full year results to be approximately £350m.

“There is strong strategic rationale for the transaction, and compelling financial benefits. Buyagift is profitable and highly cash generative, with a proven track record of strong growth,” Moonpig chief executive Nickyl Raithatha said.

Wealth management group Davy said the acquisition  “progresses both growth and competitive advantage and seems like a good deal at reasonable terms.

“Perhaps, one hopes, the first of a number of such deals,” a note published by Davy TMT analyst Dave Reynolds stated yesterday.

The deal represented a rational step for Moonpig, Reynolds added, as it “advances the cause in terms of growing the gifting revenue line.”

What’s more, “experiential gifting is digitally led and super-efficient as a result,” while Reynolds also said that “the cross-selling revenue synergies” would likely be “meaningful.”