Amazon Acquisition of Zappos Essay
WORD COUNT: 2489
Executive Summary 3 Introduction 4 Amazon Overview 4 Amazon’s Previous Acquisitions 5 Zappos Overview 6 Acquisition of Zappos 9 Strategy 11 Why Amazon wanted to acquire Zappos 11 Regulation 14 Valuation 15 Comparable Company Analysis (Comps) 15 Discounted Cash Flow (DCF) Analysis 16 Precedent Transactions Analysis 16 Historical Stock Price & Next Twelve Months (NTM) Analysis 17 Financing 19 Defence Tactics 21 Implementation 23 Risk 25 Conclusion 26 References …show more content…
Amazon is a customer-centric company for three kinds of customers: consumers, sellers and enterprises. Amazon is a Fortune 500 company, traded on the NASDAQ stock exchange since 15th May 1997.
Amazon’s Previous Acquisitions
Prior to the acquisition of Zappos, Amazon had previously acquired numerous additional companies as shown in the diagram below. (Amazon, 2014)
Amazon has purchased numerous companies prior to Zappos allowing for expansion into new markets with horizontal acquisitions to accommodate its organic growth. The purchase of ‘Bookpages.co.uk’ was an example of another horizontal acquisition for Amazon becoming their ‘Amazon UK’ business.
(Zappos, 2014) Zappos is an online shoe and clothing shop founded in 1999 by Nick Swinmurn, based in Las Vegas, Nevada, United States (About.zappos.com, 2014). Shortly after Zappos founding, current CEO, Tony Hsieh joined as co-CEO. Zappos’ primary retail segment is shoes (accounting for 80% of all sales), but eventually expanded their inventory in 2007 to include clothing, handbags, eyewear, watches and