By Stephen Phillips
Privately-held QXL.com yesterday moved to consolidate its position in the burgeoning European online market by acquiring two recently-merged UK rivals, Humpty Dumpty Ltd and eSwap which specialize in consumer-to-consumer collectable trading. Alex Czajkowski, marketing director of London-based QXL.com said: We are working diligently to solidify our position in this market pre-empting worldwide competition. QXL.com declined to disclose the terms of the deal, but analysts said it is unlikely to have paid more than $1.61m for Humpty Dumpty and eSwap, which merged in May.
QXL.com launched in the UK in November 1997 and has expanded into France, Germany and Italy, trading in eight currencies. It has more than 100,000 registered site users. Humpty and Dumpty and eSwap have a combined customer base of 15,000, growing at 100% a month, and offer a total of 15,000 items for sale. Simon Kirkpatrick, CEO of the merged company said that QXL.com used cash from its $42m venture capital pool, raised by backers LVMH and APACS earlier this year for the purchase.
George O’Connor, technology analyst at investment bank, Granville said that plummeting technology company share prices have made acquisitions difficult for publicly-quoted rivals. He called auctioning a great market for the internet with new entrants attracted by its stickiness – the likelihood of end-users revisiting auction sites to buy and sell different items.
German site, Ricardo.do.de AG floated on Frankfurt’s Neuer Markt last month and QXL.com’s UK rival iCollector Plc has announced plans to go public. Analysts also predict imminent activity from US firms including Yahoo and Amazon.com which are thought to be poised for acquisitions in the European online auction market in the near future. Dell Computer Corp, already with a strong European presence, also recently announced a US-based online auction site for computer-related equipment. In addition, number one US online auctioneer, eBay Inc purchased three-month-old German site Alan-do.de in June, but it could find its global ambitions stymied by its sliding share price, which yesterday morning stood at $89.3125 down from around $190 in May.
QXL.com is preparing for an initial public offering, expected by analysts to be launched in October or November, which could value the company as high as $805.1m.
