Deals direct owner Mnemon Limited has acquired Grays in a merger which will create Australia's largest listed e-commerce group.
The transaction will see Mnemon Liminited (ASX: MNZ) acquire 100 per cent of Grays via a scrip-for-scrip offer to Grays shareholders.
The group will be renamed Grays e-Commerce Group (GEG) upon completion of the transaction.
The takeover will create Australia's largest listed e-commerce group with gross sales in excess of $440 million and a net cash position of more than $10 million.
The combined group will bring together premium e-commerce retail brands including DealsDirect, TopBuy, Grays Online and OO.com, and establish a combined customer database of 6.2 million.
According to a company statement, MNZ and Grays have entered into a Merger Implementation Agreement that will be effected by a sale and purchase agreement.
MNZ chairman, Naseema Sparks, said the transaction was consistent with MNZ's consolidation strategy and offered shareholders the opportunity to be part of Australia's largest e-commerce group with a portfolio of well known brands serving consumer and business markets.
"By combining the businesses, we will secure a market leading position," he said.
"Integration of the two business will provide substantial benefits of scale."
Grays chief executive, Mark Bayliss, who will become chief executive of the new company, said the transaction made strategic sense.
"The Australian e-commerce market is evolving rapidly and the scale of Grays e-Commerce Group will be an important factor in leveraging growth across multiple sectors," he said.
"Grays is a true pioneer in the Australian e-commerce industry, establishing it's first online presence in 2000."
"Since then, it has developed the largest B2B e-commerce auction marketplace in the Asia-Pacific region and has been an innovator in retail, establishing the largest independent e-commerce wine business in Australia, among other initiatives."
It has a market leading position in B2B e-commerce auctioneering, specialising in the sale of industrial and commercial assets.
It also has a B2C offering, selling a wide range of consumer products including wine, IT and consumer electronics, furniture, outdoor goods and fine jewellery.
Bayliss said Grays had a proven track record in the development of industry leading technologies and that the combined group would benefit from its significant investment in optimising supply chain processes and infrastructure, improving the service we offer customers."
Under the terms of the transaction Grays shareholders will receive 73.3 million new MNZ shares on completion.
Excluding bonus shares, Grays shareholders will own 78 per cent of the issued capital after the transaction.
The new board will comprise of Jonathan Pinshaw, as non-executive chairman, Naseema Sparks as non-executive director, Will Vicars (non-executive director) and Mark Bayliss as executive director and chief executive.