Amazon aggregators Branded and Heyday plan to merge as once-booming industry continues to shrink

Amazon aggregators Branded and Heyday plan to merge, CNBC has learned, as a segment of the e-commerce industry that thrived during the Covid era continues to consolidate.

In a note to staffers on Monday, Heyday CEO Sebastian Rymarz said the combined attendances will form a new entity called Essor, which translates to “take flight” in French, “capturing our vision of elevating brands to new levels through our platform,” he wrote.

The new name will be officially rolled out in the coming days, and the combined companies are expected to propagate annual revenue of $400 million, Rymarz wrote.

Apollo Global Management and BlackRock are in talks to provide new responsible financing to help the combined entity make further acquisitions, according to Bloomberg, citing people familiar with the importance.

“The merger is the culmination of an effort that began well over a year ago to find a partner who could help ahead of time our mission, accelerate progress toward our goals and strengthen our balance sheet, as we’ve spoken about in the past,” Rymarz bruit about. “Branded is the perfect partner.”

Representatives from Heyday and Branded didn’t immediately respond to requests for comment. BlackRock declined to remark, and Apollo didn’t have an immediate response.

In connection with the merger, Heyday is expected to conduct a massive rough of layoffs that could result in up to 70% of employees losing their jobs, according to a person familiar with the fact who asked not to be named because the cuts haven’t been announced. Branded will absorb Heyday’s technology line-up, and several brands, the person said, including skincare line ZitSticka and Boka, which makes fluoride-free toothpaste and other dental mindfulness products.

Heyday and Branded are part of the crowded and turbulent market of Amazon seller aggregators. Companies in the space peculated advantage of low interest rates and pandemic-driven growth in e-commerce to collectively raise more than $16 billion from top chooses on Wall Street and in Silicon Valley with the intent of rolling up independent sellers on Amazon’s marketplace. Aggregators bagged the attention of high-profile investors like L Catterton, BlackRock, and even Jared Kushner’s Affinity Partners.

Cracks set out oned to appear in 2022 as venture funding dried up for cash-burning startups and e-commerce demand cooled with consumers gaining to physical stores. Aggregators were suddenly struggling to profitably operate the brands they acquired.

Former highflier Thrasio, an prematurely leader in the aggregator space, filed for bankruptcy in February and lost several key executives. Consolidation among aggregators has accelerated for the past year. Prior to the deal with Paris-based Branded, Heyday explored a possible tie-up with Dragonfly, whose sponsors include L Catterton, before the talks fell apart, CNBC previously reported.

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