Eden Prairie-based iMedia Brands Inc. plans to spend about $95 million acquire an interactive retail company based in Germany that specializes in selling items through a proprietary auction process.
The deal with 123tv gives iMedia access to markets in Germany and Austria along with expertise and technology to sell items via Dutch-style live and automated auctions.
iMedia is the parent company of ShopHQ, the cable, satellite and broadcast home shopping TV network.
Tim Peterman, chief executive of iMedia, said bringing 123tv's auction process and technology to the United States could change the digital shopping experience.
"We believe gamification of consumers' emotion-based shopping experience is the ultimate disruption to the status quo," Peterman said in a news release. "123tv's entrepreneurial team with their proprietary technologies are experts in this shopping disruption."
Dutch auctions can be done in a variety of ways, but generally rely on the bidders to set the price for the item, which can establish a gaming-type atmosphere. In some Dutch auctions the price starts high and then the drops until a bid or bids are accepted.
Not unlike ShopHQ, 123tv Group sells clothing, watches, jewelry, health and wellness products, and home and garden products through TV channels, online and a mobile app.
Founded in 2004, 123tv is now a $183.4 million company with 120 employees.
Profits have soared in recent years, with earnings of $6.1 million in 2020, up from approximately $1 million the previous year.
iMedia had revenue of $454.2 million for its most recent fiscal year ended Jan. 31. Its annual revenues were down for the fifth consecutive year and has consistently shown net losses during that time.
123tv is primarily owned by Arcus Capital AG, an independent investment company based in Germany, and its investment partners BE Beteiligungen and Iris Capital.
iMedia plans to pay for the acquisition in part through a new $75 million bond offering. The final transaction price could increase by as much as $50 million depending on the achievement of revenue targets.
iMedia expects the deal to be completed in the fourth quarter of 2021.It is subject to approvals from the German and Austrian government.
Shares of iMedia closed at $5.65 a share, up 6.6% in trading Wednesday. Over the last 52 weeks, shares have ranged between $3.93 and $10.48 a share.