Abney Associates advising investors on Rakuten Inc as the Japanese internet supplier continues its policy of expansion through acquisitions.
Rakuten Incorporated continues to grow as its 5 year and $1.6 billion buying spree expands to include the streaming video services provider Viki Inc. Although no official price was announced for the sale, most estimates place the value at around $200 million for the video streaming network. Rakuten has continued to diversify its interests across the gamut of internet-based services as it competes toe to toe with foreign providers in the Japanese market.
With the company’s main revenue based on its shopping portal Ichiba, that connects retailers and shoppers within Japan and through its English language site foreign consumers with iconic Japanese products, Rakuten expects to see international sales account for 70 percent of its revenues by 2020. This goal will be supported by earlier purchases of foreign internet retailers Buy.com Inc, Price Minister SA and Kobo Inc.
“They are playing this strategy out very smartly, with them holding the lion share of the domestic Japanese online retail sector, they are turning their enterprise into a two way street with selective global acquisitions. Distribution of Japanese product lines, offshore and direct access to their domestic consumers from the already well-established foreign supply networks held by their buyouts,” explained James Carter, Senior Vice President of Mergers and Acquisitions at Abney Associates.
As the company’s retail sales operations expand at a massive rate Rakuten has been seen to be insuring itself by finding non-traditional revenues streams from advertising synergies in Viki and from its holdings in the social network operator Pinterest Inc. The Japanese company has seen a spectacular year with its ROI of 59.8 percent one of the highest of any internet concern and among the best performing of any Japanese stocks.
“When you see a company behaving this well in regards to both stability and expansion it deserves interest, they have built upon a well-established model for their revenue base but are not afraid to look outside the box for extra diversity in their earnings. Investors appreciate that sort of thinking and the company’s value is beginning to reflect that confidence, as we continue to monitor their future forecast we will be examining them further on behalf of our clients and potential investors at Abney Associates,” added James Carter, Senior Vice President of Mergers and Acquisitions at Abney Associates.
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