The largest Amazon third-party seller in the U.S. plans to go public via SPAC

Packageable, a top U.S. seller on Amazon , is going public through a SPAC. It announced on Thursday that it will merge with Highland Transcend Partners I Corp. to go public, with a post-merger market value of $1.55 billion.

Packable is the parent company of health and beauty brand Pharmapacks. Pharmapacks started operating physical pharmacy business in 2010 and has now grown into the largest Amazon seller in the United States, selling health, personal care and beauty products on multiple online platforms.

Pharmapacks raised more than $250 million from Carlyle Group in a deal that valued the company at about $1.1 billion, while Packable raised $180 million from investors including Fidelity Investments and Lugard Road Capital.

It is reported that SPAC is a way of overseas backdoor listing, which integrates the characteristics and purposes of financial products such as direct listing, overseas mergers and acquisitions, reverse takeovers, and private placements to achieve the purpose of corporate listing and financing. It has become an increasingly popular listing channel.

Opportunities and challenges facing enterprise development

It is understood that in addition to the Amazon platform, Pharmapacks also sells its products on websites such as Walmart, eBay, Kroger, Target and Facebook.

Packable said in an investor conference that it expects revenue to increase 22% this year to $456 million, and that it expects annual growth of 38% by 2024, when sales will reach $1.3 billion.

However, Pharmapacks predicts that the company will not generate operating profits until 2024. Based on its estimated data in 2021, the company spends about half of its revenue on sales and distribution, and another 20% on warehousing and administrative costs.

Like other e-commerce companies, Packable has benefited from the surge in online consumption caused by the global pandemic. However, its revenue growth began to slow significantly in the first half of this year due to inventory shortages, delayed purchase orders, and a decrease in new merchants caused by global supply chain restrictions .

Packable mentioned that the ongoing global supply chain issues caused by the epidemic are a potential risk to its business. Since a large part of its revenue is tied to a few markets, the loss of access to these markets or the reduction in consumer purchasing activity will affect the company's profits.

In addition, the company's development is also affected by unfair competition and illegal activities of other third-party sellers, as well as the market planning policies issued by the Amazon platform. Moreover, the long-standing problems of counterfeit goods, unsafe products and false reviews in the Amazon market have not been resolved.

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