Kroger spins off digital coupon service

The Kroger Co. is selling its You Technology digital coupon and rebate platform, but not ending its involvement with the service.

Digital promotions and analytics provider Inmar has completed its acquisition of You Technology LLC (YouTech) from Kroger for $565 million, including $400 million of cash consideration received upon closing. Kroger intends to use the after-tax cash proceeds from the sale to reduce debt.

Terms of the purchase include a long-term service agreement for Inmar to provide digital coupon services to all of Kroger’s store banners. YouTech’s cloud-based retail platform enables retailers and CPG manufacturers to create integrated digital offers and marketing campaigns.

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

In addition, as part of the acquisition, Cheryl Black, CEO of YouTech, will join Inmar's Executive Management Team as VP and general manager, 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."

Kroger initially purchased YouTech, which is based in Silicon Valley and founded in 2008, in February 2014 for an undisclosed sum. The acquisition was part of a broader Kroger strategy to strengthen its connection with customers through growing digital and mobile channels.
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