Home design e-tailer Fab.com is in talks to be acquired, according to comments its CEO made to Forbes.com.
“We have had a lot of inbound interest in the valuable Fab brand and assets. We are currently evaluating such inquiries,” Fab.com CEO Jason Goldberg said, according to the report. “We have no comment on the status of those discussions.”
The attributed comment included this: “As point of fact, we are not shopping Fab around and we have not hired any bankers or agents.” This is both true and potentially misleading. It’s intended to imply that the company is not for sale, and yet the initial part of the quotes make it clear it is. If you are “currently evaluating” offers based on “a lot of inbound interest,” then you are up for sale. The distinction of company management reaching out to potential acquirers—”shopping Fab around”—as opposed to letting them do the dialing is not meaningful. What difference does it make who dialed the phone? It’s what is discussed and put on the table that matters.
As for not having hired any bankers or agents, that again doesn’t mean much. They’ll be hired when a tentative deal is reached. And if people are calling, no need to pay anyone to find prospects.
The much more meaningful detail, though, are suggestions about the price being discussed, with Forbes quoting an industry analyst saying the range for the sale is $100 million to $150 million.
“That’s a dramatic drop from the $1 billion valuation slapped on Fab.com last June after it raised $150 million in a Series D round led by Andreessen Horowitz and China Internet giant, Tencent,” Forbes reported. “China’s Alibaba had looked at investing in Fab.com prior to the series D but after looking into the business. Executives decided to pass on the deal. Since joining the $1 billion club, Fab.com has faced serious setbacks as it switched its strategy from flash sales to traditional e-commerce: the resignation of cofounder Bradford Shellhammer, the firing of COO Beth Ferreira, and a series of deep layoffs that has cut the company’s roster in half.”
PYMNTS.com President Karen Webster found the price drop intriguing. “They are informally up for sale at a tenth of the price they once thought. Talk about a case study,” she said. “They were once the darling.”