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Kroger closes YouTech sale for $565 million

Inmar to provide digital coupon services under long-term pact

Russell Redman

March 14, 2019

3 Min Read
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The Kroger Co. has completed the sale of its You Technology digital coupon subsidiary to e-commerce analytics firm Inmar in a $565 million deal.

Kroger said yesterday that the transaction includes $400 million in cash received upon closing, which it aims to use to pay down debt. When announcing their agreement in December, Kroger and Inmar didn’t disclose financial terms.

Also as part of the YouTech sale, Kroger finalized a long-term pact with Winston-Salem, N.C.-based Inmar to provide digital offer management services to its supermarkets.

"The monetization of our investment in YouTech and long-term agreement with Inmar demonstrate how Kroger can create value in different ways," Stuart Aitken, senior vice president of alternative business at Kroger, said in a statement. "We are excited about the additional value that can be brought forward through future partnerships to create customer value."

Kroger executives last fall said the company is looking to alternative businesses — including partnerships, media, consumer packaged goods (CPG) insights and Kroger Personal Finance — to help reach its goal of $400 million in operating profit by 2020 under the Restock Kroger initiative.

That objective also could entail asset sales, according to Jefferies analyst Christopher Mandeville. His team recently attended a breakfast hosted by retiring Kroger Chief Financial Officer Mike Schlotman, incoming CFO and Kroger Personal Finance CEO Gary Millerchip and Aitken.

Related:Kroger goes live with self-driving delivery vehicles

“Management is seeking to leverage the strong existing assets of its alternative businesses (media, Kroger Personal Finance, 84.51⁰ insights) and marry various data sets to drive better sales execution and provide an integrated set of solutions that allow for a more dynamic view of the shopper,” Mandeville said in a research note Wednesday. “While management does not intend on monetizing these core alternative assets, opportunity may arise in which Kroger could realize incremental EBIT gains from the sale of certain non-core alternative assets that it cultivates. For example, this morning, Kroger announced the sale of its digital coupon/rebate publishing platform YouTech to Inmar for $565 million, including $400 million in pretax cash.”

Kroger had acquired YouTech in February 2014. The South San Francisco-based company provides a cloud-based platform for the redemption of digital offers at Kroger and other U.S. retailers. Kroger said the combination of YouTech's online engagement capabilities with Inmar's expertise in managing open platforms will help retailers and CPG companies better compete by improving digital coupon and rebate access and distribution.

Related:Kroger banks on burgeoning sources of revenue

"We look forward to our new strategic relationship with Inmar, which will bring Kroger's unique assets and personalization expertise together with Inmar's technology solutions to drive more innovation and value for Kroger customers and CPG partners," said Yael Cosset, chief digital officer at Cincinnati-based Kroger.

Cheryl_Black_You_Technology_CEO.pngYouTech CEO Cheryl Black (left) is slated to join Inmar's executive management team as vice president and general manager of retail solutions.

"With this acquisition, we will be able to accelerate our innovation to deliver a more cost-effective, enhanced product set including better tools, reporting and analytics, as well as broader distribution," said David Mounts, chairman and CEO of Inmar. "We are excited to have Cheryl join our team and look forward to having her customer focus, retail expertise and entrepreneurial spirit leading product strategy for retail."

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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