Salt Lake City-based Red Wire Group LLC, a contract sewing manufacturer, has been acquired by 12 ReTech Corp., a retail fashion shopping software company with U.S. headquarters in Scottsdale, Arizona, and operations in Europe and Asia. The stock-for-stock transaction is scheduled to close by the end of January.{mprestriction ids="1,3"}
Red Wire’s local factory is in very close proximity to the 12 ReTech-owned Emotion Fashion Group’s (EFC) facility in Salt Lake, making the deal a natural fit, according to a release from 12 ReTEch. The company said that Red Wire Group has outgrown its existing facility's capacity and can benefit from the excess capacity that EFG currently possesses.
Angelo Ponzetta, 12 ReTech’s CEO, said, “We believe that Red Wire is very synergistic to our current EFG operation. In addition to the revenue and profits that Red Wire brings to the group, we add efficiency and expertise to continue to drive down our production costs that began with our relocation of EFG from Los Angeles to Salt Lake City. This extra capacity and efficiency will allow Red Wire to take on many more jobs that should catapult its revenue from its current $650,000 to three to four times that annually, while increasing our margins.”
“Being acquired by 12 ReTech was just the catalyst for future acquisitions. I am thrilled to team up with Red Wire. Their production team is outstanding and will allow our team to focus on revenue growth and delivery fulfillment,” said Hub Blanchett, president of EFG.
“We have been working on this acquisition throughout the holiday season and while we executed non-binding letters of intent, we decided to wait until the signing of the exchange agreement to announce this news as our past experience with acquisitions has taught us that Murphy’s law typically applies at the signed-letter-of-intent stage.” said Ponzetta.
“I am excited to become part of 12 ReTech team,” said Greg Haehl, managing member of Red Wire. “Being a technology expert myself, I have seen what they are doing to help retailers improve themselves. The technology that is available at 12 ReTech is very exciting and I plan to lend my own expertise to their efforts. At the same time, Red Wire’s capabilities will help EFG’s own manufacturing floor operations and their extra capacity will allow us to substantially grow our own business. I have seen first-hand the commitment and assistance the whole 12 ReTech team brings to every acquisition and this strongly influenced our decision to be acquired.”
“At our core, we are a software company whose technology allows retailers to combat the dual threats of Walmart and Amazon, both online and in physical stores,” 12 ReTech said in a release. “Our micro-brand rollup acquisition strategy allows us to demonstrate the effectiveness of our software, devise and test new products, while providing shareholder value through immediate revenue and earnings growth.” {/mprestriction}
