Magalu Buys KaBuM!

After acquiring the Jovem Nerd group, Magazine Luiza continues its expansion and acquires the computer store KaBuM!

Magazine Luiza, a retail store for electronics and furniture in general, seems to continue to advance to dominate the technology market, niche nerd and gamer. After acquiring the young Nerd group, Magalu is now attacking the computer market by buying the online store KaBuM!, one of the largest technology and games e-commerce platforms in the country.

“With the purchase of KaBuM!, we consolidated ourselves as one of the leaders in formal Brazilian e-commerce and reinforced our presence in one of the fastest growing markets in the world – that of products for geeks and gamers”, says Frederico Trajano, CEO of Magalu .

The total purchase price will be paid in three stages. The first installment, in cash, is 1 billion reais. The second stage involves the transfer of 75 million common shares of Magalu, over a year and a half. The third payment stage – of up to 50 million shares – will take place in January 2024 and will be conditional on the achievement of KaBuM! goals. In total, the operation costs around 3,5 billion reais, according to market estimates.

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According to the statement, KaBuM! more than doubled in 2020, thanks to the pandemic, and registered an increase of 128% compared to 2019. Already in the first five months of 2021, the virtual store registered a growth of 62% compared to the same period of the previous year.

Magalu Dominating the Nerd World

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With the purchase of the virtual store, in addition to the Young Nerd group and to the Canal Tech website, the Luiza magazine further increases its presence in a technology and games market, leaving a bit of the furniture and home appliance niche already swollen by competitors such as Casas Bahia and Ponto Frio. This will now allow computer products from KaBuM! will be offered through the Magazine Luiza app and the various Magalu products, such as smartphones and TVs, will complement the KaBuM! portfolio.

“With the acquisition, Magalu reinforces the strategic pillar of new categories, with an assortment that is extremely complementary to the current one and with enormous growth potential. Additionally, together with the recent acquisitions Jovem Nerd and CanalTech, KaBuM! and Magalu will be able to offer a complete shopping, content and entertainment experience for technology lovers,” the company wrote.

The acquisition is still subject to approval by the Administrative Council for Economic Defense (Cade) and by the company's shareholders. Last Wednesday (14), the shares of Magazine Luiza (MGLU3) closed up 1,96% on the Brazilian stock exchange, traded at R$ 22,93.

Gamers' old friend

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The KaBuM Store! was born in 2003 and offers computer products, such as video cards, mice, gamer keyboards and other peripherals, and was also a pioneer in electronic sports in Brazil. He created one of the biggest League of Legends teams in the country, “KaBuM! Sports”, four-time national champion and the first Brazilian representative in the world championship. The KaBuM! Sports also supports other e-sports modalities, such as Counter Strike, FIFA and Free Fire.

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Magazine Luiza, or Magalu, is a multi-channel digital retail platform in Brazil. Founded in 1957 in the city of Franca by the couple Pelegrino José Donato and his wife Luiza Trajano Donato. It has more than 1000 physical stores, is present in 18 states in the country and its business model today is characterized as a digital platform with physical points. Its e-commerce operation won 12 times the Diamond trophy in the Excellence in Quality Electronic Commerce Award – B2C.

So, tell us what you think of the acquisition there in the comments? Do you think this will allow KaBuM! offer cheaper products? Have you already bought something at KaBuM!? Take the opportunity to read more about Technology on our website.

Source: Channel Tech

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Paulo Fabris is a journalist, writer, RPG player, gamer, cosplayer, nerd and fan of anime since the time of TV Manchete.