Bed Bath & Beyond Inc. (NASDAQ: BBBY) has
announced the acquisition of One Kings Lane in an all-cash deal, although the price was undisclosed.
Barclays’ Matthew McClintock maintains an Equal Weight rating on Bed Bath & Beyond, with a price target of $50.
“The acquisition is expected by the company to be slightly dilutive to BBBY's earnings for FY16, after transaction and
integration costs,” McClintock mentioned.
One Kings Lane
The analyst explained that One Kings Lane was an online retailer of home furnishings and furniture, with design studios in New
York and San Francisco, working directly with designers, "taste-makers" and dealers to create its merchandise assortment.
The company was estimated to have achieved sales of $350 million in 2014, representing 7.8 percent year-on-year growth.
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On Bed Bath & Beyond: "We Remain Cautious On Fundamentals, Shares"
“Founded as a flash sale site in 2009 by Ali Pincus and Susan Feldman, it reportedly reached a ~$900 million valuation in Jan.
2014 backed by VC funding,” according to the Barclays report.
The company underwent restructuring, layoffs and a shift away from flash sales, moving to curated lifestyle offerings and
designer partnerships with proprietary merchandise.
Impact Of The Acquisition
According to news reports earlier in 2016, it was speculated that One Kings Lane would be sold for $150–$230 million.
McClintock expects the deal to serve as a potential catalyst for Bed Bath & Beyond, while also further diversifying the
company’s business by expanding its exposure to home furniture.
Latest Ratings for BBBY
| Date |
Firm |
Action |
From |
To |
| May 2016 |
Topeka Capital |
Initiates Coverage on |
|
Sell |
| Apr 2016 |
Citigroup |
Maintains |
|
Sell |
| Mar 2016 |
Credit Suisse |
Maintains |
|
Neutral |
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BBBY
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