Discount Dragon offers surplus items, including those that have been mis-packaged or are close to their best-before date
Let’s Explore Group PLC has proposed becoming an online rival to B&M, Lidl and Aldi with the £4 million acquisition of Discount Dragon, a business run by its chief executive.
The company, which sold its previous two operating divisions in the first half of the year and changed its name from Immotion Group, said it plans to change its name to Huddled Group PLC if the deal goes through.
The proposal is to buy Discount Dragon’s parent company, Huddled Group PLC, for an initial £3.45 million, with a deferred payment to potentially take the price up to £3.95 million by April 2025.
Let’s Explore CEO Martin Higginson is also the boss of Huddled and owns 21.63% of its equity.
In the first half of this year, Let’s Explore sold its Location Based Entertainment VR (LBE) and Uvisan businesses for a total of £19 million and returned cash to shareholders.
The Huddled deal will use up most of the £6.8 million cash it had at the end of June, though coffers are due to be topped up with a further US$1.25 million receivable via a loan note issued by the buyer of LBE by next February.
The acquisition of Discount Dragon, which needs the approval of shareholders, offers a “significant opportunity for growth”, the company said, as it is a “fast-growing direct-to-consumer e-commerce business” focused on the sale of branded dry and tinned groceries, and beverages.
How it differs from FTSE 100-listed B&M European Value, Lidl and Aldi is that Discount Dragon offers surplus items, including those that have been mis-packaged or are close to their best-before date, for significant discounts to the mainstream grocery market.
Huddled bought the e-commerce business last year and rebranded it Discount Dragon, reporting revenues of over £450,000 in August 2023, the AIM-listed company said.
Earlier this month, Huddled acquired the UK trading assets and stock of it main direct competitor, Motatos, for an undisclosed sum, as the rival’s Swedish owner decided to exit the UK.
“The board believes the acquisition will be transformational for the group, with the market for discounted groceries having never been more relevant”