Tiny to purchase WholesalePet from Emerge Commerce for $12.5 million CAD

Emerge Commerce originally acquired the online pet supply wholesaler in 2021.

Toronto-based Emerge Commerce has signed a definitive agreement that will see it sell B2B e-commerce marketplace WholesalePet.com to Victoria-based Tiny for $9.25 million USD ($12.5 million CAD) in cash. 

This sale comes five months after Emerge Commerce sold off discount website WagJag for $1 million.

The sale comes just over two years after Emerge Commerce purchased WholesalePet in a deal ultimately valued at $16 million USD ($21.5 million CAD), according to Emerge founder and CEO Ghassan Halazon.

Halazon told BetaKit in an email statement that, inclusive of the profit generated since acquiring WholesalePet, Emerge essentially broke even on the transaction on a cash basis.

Emerge plans to use the proceeds from this transaction to reduce its debts, including deferred payments still owed to WholesalePet from its acquisition.

Reducing debts was one of Emerge’s top priorities outlined in its Q3 earnings report

“The sale of [WholesalePet] marks our most substantial transaction to date, eliminating the majority of our debt, saving us an estimated $1.38 million in annual interest expense, and paving the way for a refresh scenario to double down on our profitable grocery and golf businesses, with a focus on driving organic growth in 2024,” Halazon said in a statement.

Founded in 2001, WholesalePet operates as an online storefront, connecting vendors that offer a variety of bulk pet supplies to pet boutiques, pet stores, and pet service businesses. Following Emerge’s initial acquisition of WholesalePet, Halazon noted that it had an “impressive 20-year track record” of steady organic revenue growth, profitability, and cash flow. 

“The business has impeccable net revenue retention and requires minimal marketing spend, with a merchant network that is now 8,000-plus strong,” Halazon said at the time.

This sale comes five months after Emerge sold off discount website WagJag for $1 million, which it originally purchased from TorStar Corp. for $500,000 in 2017. 

RELATED: Tiny enters deal to go public on TSXV through merger with WeCommerce

Following the sale of WholesalePet, which closed on January 31, 2024, Emerge said it will retain four brands under its umbrella, including truLOCAL, Carnivore Club, UnderPar, and JustGolfStuff.

Both Tiny and Emerge are known for acquiring and investing in businesses, particularly in the e-commerce space. In early 2023, Tiny went public on the TSX Venture Exchange by a merger with WeCommerce, a subsidiary it created in 2019 that focused on acquiring businesses that were within the Shopify partner ecosystem.  

In October 2023, Tiny closed a majority acquisition of Letterboxd, a popular social platform that allows users to discuss and review films. Terms of the transaction were not disclosed, but Letterboxd co-founders Matthew Buchanan and Karl von Randow subscribed to a private placement of Tiny Class A shares, resulting in gross proceeds to Tiny amounting just shy of $5 million.

UPDATE (01/25/24): This story was updated to reflect the price Emerge ultimately paid to acquire WholesalePet in 2021. An earlier version of this story noted the full potential sale value if earnout bonuses were met.

UPDATE (01/26/24): This story was updated to include comment from Emerge founder and CEO Ghassan Halazon.

UPDATE (02/01/24): This story was updated to note the transaction closed on January 31, 2024.

Feature image courtesy Dan Fallak via LinkedIn.

Alex Riehl

Alex Riehl

Alex Riehl is a staff writer and newsletter curator at BetaKit with a Bachelor of Journalism from Carleton University. He's interested in tech, gaming, and sports. You can find out more about him at alexriehl.com or @RiehlAlex99 on Twitter.

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