Tuesday, February 23, 2010

Alibris Acquires Monsoon - Is M&A Heating Up?

Big M&A (Mergers and Acquisition) news came out yesterday with the announcement that Alibris Holdings, the parent company of Alibris.com, was acquiring Monsoon a marketplace integrator with a substantial media business.

"Alibris Holdings, Inc, owner of Alibris, Inc., the premier online marketplace for sellers of new and used books, music, and movies, announced today that it is acquiring Monsoon, Inc., an Oregon-based marketplace selling solutions company, for a combination of cash and stock in Alibris Holdings. Oak Hill Capital, a private equity firm that acquired Alibris Holdings in 2006, provided funding for the transaction along with additional bank financing from Square 1 Bank. After the merger closes, which is expected by early March, Alibris and Monsoon will continue to operate as separate businesses under their existing names."

Seattle's TechFlash blog had a fairly complete post on the acquisition and the possible increase in M&A deals in the space and Scot Wingo wondered aloud on his Amazon Strategies blog what this meant for the Monsoon/Amazon relationship since Alibris is a competitor to Amazon.

I spoke with Monsoon's CEO Kanth Gopalpur about their relationship with Amazon and he said "Monsoon has a long standing relationship with Amazon and looks forward to continuing to build on that partnership, both in media and consumer goods categories. In addition, Alibris is both a marketplace and a third-party seller on Amazon and this new combination with Monsoon will strengthen their integration efforts with many marketplaces.

I would say this opens the doors to similar deals in the space as companies try to find growth. After some tough years, many integrators are seeing some signs of life in their business while others continue to struggle. This deal looks like a combination of two strong players and we are likely to see more in 2010 and 2011.

With other retailers launching marketplaces the need for some kind of multi-channel integration becomes paramount to managing the growth. This looks like a great marriage to me.

Full disclosure: Both Monsoon and Alibris are integration partners with Buy.com and will continue operating separately.

Just my 15%