Bedding and homeware chain Adairs (ASX:ADH) has been around for over a century and today it took a big step to secure its future.

While consumer-focused small caps have had a positive year in 2019, retail has progressively moved online. Adairs has an online presence but wants to grow that even further.

Today the company announced it was buying 12-year-old home and living online retailer Mocka for $75.5m. This will be paid in a mixture of cash and shares – 65 per cent up front and the remainder gradually over the next three years.

Adairs told shareholders the acquisition would increase online revenue to 29 per cent and pro forma earnings per share accretion to 10 per cent.

It previously provided full year earnings guidance of $43m-$46m but has updated that to $48m-$52m to account for Mocka.

CEO Mark Ronan said the purchase was highly complementary and attractive and it would benefit from synergies and shared philosophies.

“We see many opportunities for Adairs to add value to an already successful business,” he said.

“Our knowledge and experience of the home market will allow us to help management further develop the Mocka brand, especially in Australia, and support the Mocka team to continue to deliver growth.”

Shares rose 19 per cent at market open and are up over 60 per cent since mid-June.

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In other ASX small cap corporate news today:

Chinese e-commerce play Roo Life Group (ASX:DNA), which used to be called OpenDNA, formed a partnership with WMall. WMall is an e-commerce platform connecting western brands to daigou sales. The first sales revenue is forecast this month and is expected to be $70,000.

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