Kingfisher has snapped up European online marketplace NeedHelp in a deal worth €10 million (£8.9 million) as the home improvement retailer seeks to expand its digital services during the coronavirus pandemic.
As part of the transaction, NeedHelp founder Guillaume de Kergariou has reinvested sale proceeds to retain a 20% interest in the business, while Kingfisher (KGF), whose brands include B&Q, Castorama, and Brico Depot, will own 80%. As more people are seeking to improve their homes since the COVID-19 pandemic began, NeedHelp has seen demand accelerate, with its monthly revenue doubling after the first lockdown period.
Needhelp is an online platform that connects customers who need home improvement help, either in-store or online, and includes professional tradespeople and other skilled experts. The company provides its services to customers in more than 500 stores, as well as to home improvement retailers. Most of its business is currently in France, but NeedHelp also operates in Switzerland and has recently expanded into Germany, Belgium, Austria, and the Netherlands. Kingfisher now plans to roll out the platform in the UK and Poland.
“To serve customers effectively today, we need to be more digital and service orientated, while leveraging our strong store assets. Online services marketplaces are key to the future of home improvement retail and NeedHelp is an established and fast-growing player in this arena,” said Kingfisher CEO Thierry Garnier. “Its acquisition accelerates our digital capabilities and extends the services that we can provide our customers – two central components of our future growth strategy.”
KGF shares have climbed 27% so far this year as the company continues to benefit from the do-it-yourself (DIY) trend during the COVID-19 pandemic. (See KGF stock analysis on TipRanks)
RBC Capital analyst Richard Chamberlain recently reiterated a Buy rating on the stock with a Street high price target of 375p (36% upside potential).
“We remain bullish on home-related retail given consumers are spending more time at home, given increased wear and tear, and as we expect consumers to continue to invest in their homes as a store of value, and to improve their standard of living,” Chamberlain wrote in a note to investors.
Overall, Wall Street analysts have a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus shows 5 Buys versus 1 Hold and 2 Sells. The average analyst price target stands at $314.29p, implying 14% upside potential lies ahead over the coming year.
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