Global-e Inks $500M Deal to Acquire Flow Commerce

Global-e (GLBE) has inked a deal to snap up Flow Commerce, a technology-based cross-border e-commerce software solution for emerging brands, in a cash-and-stock deal worth $500 million.

Following the news, shares of the cross-border end-to-end platform for brands and retailers jumped 15.75% to close at $60.99 on Wednesday.

The completion of the deal awaits certain regulatory approvals. It is expected to close during the first quarter of 2022. (See Global-e stock charts on TipRanks)

Benefits of the Acquisition

The acquisition is expected to strengthen Global-e’s platform offering, capabilities and customer base.

Through Flow, Global-e is likely to enhance its exclusive relationship with Shopify (SHOP) to offer cross-border services to a high number of merchants on the platform, along with its current end-to-end third-party solution. Simultaneously, the company has agreed to issue a warrant worth $70 million in Global-e shares to Shopify.

Terms of the Deal

The purchase price includes a base consideration of $425 million, and $75 million as an additional amount based on financial results in 2021. Also, Global-e shares worth $45 million for performance-based vesting warrants for Flow shares are included in the deal price.

In 2021, about $20 million in net revenues is expected to be generated by Flow.

CEO Comments

The President of Global-e, Nir Debbi, said, “This acquisition follows our strategy, ultimately allowing us to serve small and emerging brands in the most sophisticated and light-weight way possible, by utilizing Flow’s cutting edge technology coupled with Global-e’s best-in-class expertise and unique data models.”

“The combination of Flow’s small merchant solution and our existing market-leading solution for large enterprise merchants, is expected to allow us to position our platform as a leading cross-border solution for any size of merchant, from self-served lightweight solutions for small and emerging brands, all the way to complex tailor-made enterprise solutions for the world’s largest brands,” Debbi added.

Analyst’s Recommendation

On November 11, Raymond James analyst Brian Peterson maintained a Buy rating and a price target of $68 (11.5% upside potential) on the stock.

Shares of Global-e have exploded 139.2% over the past year. Overall, the stock has a Strong Buy consensus rating based on 5 unanimous Buys. The average Global-e price target of $75.60 implies 24% upside potential.

Smart Score

Global-e scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. (See Top Smart Score Stocks on TipRanks)