Saudi Arabia-based Arabian Centres Co (ACC) and Fawaz Abdulaziz Alhokair Co. have signed agreements to acquire 51 percent of an e-commerce platform for 138 million riyals ($37 million).

The buyers will acquire 41.2 per cent of VogaCloset’s existing shares in a joint venture based on a pre-money valuation of $60 million, subject to an earn-out structure conditional on certain growth thresholds according to a joint statement released Wednesday.

An additional $12 million will be injected into VogaCloset to develop its presence in Saudi Arabia, grow its customer base and support the integration of Alhokair and ACC’s brands onto the e-commerce platform.

VogaCloset is the owner and operator of the online platform It is a UK-based online store offering the latest fashion trends from the runways directly to buyers in the Middle East.

Post transaction, Alhokair and ACC will own a combined 51 per cent stake in Vogacloset, the companies said.

Both companies said they will finance the acquisition internally and the deal value will be paid in cash to VogaCloset shareholders, when the amended memorandum of association is signed.

“Partnering with Alhokair and ACC in Saudi Arabia, our key market, is a strategic leap for VogaCloset,” said Hanin Hamarneh, CEO of VogaCloset. “This partnership, and the new investment that it will bring, will support and accelerate the execution of our very ambitious growth plans in Saudi Arabia and the Middle East and will help us to rapidly expand the market for our suppliers’ products.”

Alhokair said it will introduce a range of its brands on VogaCloset while ACC will offer its mall tenants to include listings on the online marketplace.

Marwan Moukarzel, CEO of Alhokair said: “This strategic investment in a sizeable and profitable regional e-commerce player is the most direct route for Alhokair to extend its leadership position in its core Saudi market – from offline to the online space, while safeguarding our competitive market position.”

Following the completion of the acquisition by June, VogaCloset intends to make use of ACC’s offline infrastructure and offer services instore pick up and return services.

Faisal Al Jedai, CEO of ACC said: “The partnership with VogaCloset will greatly enhance convenience and engagement for tenants and customers…enabling us to offer a more holistic proposition for all our mall tenants, by giving their brands an improved online presence.”

(Writing by Brinda Darasha; editing by Seban Scaria)

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© ZAWYA 2021