Kornit Digital, a developer of textile printing technology, has closed a cooperation agreement with online retail giant Amazon.com.
The Deal follows purchases made by Amazon in January 2016. Kornit Digital will supply printing systems, ink, and a fully personalized garment decoration solution with ultra-fast turnaround times involving on-demand personalized design of shirts, in the framework of the “Merch” by Amazon program.
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U.S. online apparel sales in 2015 amounted to $90 billion, according to the Internet Retailer publication, representing 20% year over year growth.
The agreement includes an allocation of five-year options for Amazon to purchase up to 2.93 million shares in Kornit (8% of the company’s share capital) at an exercise price of $13.05 per share – the average Kornit share price over the 30 days preceding the signing of the deal.
The number of options to be exercised depends on the volume of products and services that Amazon buys from Kornit, Amazon will exercise all the options and proceeds from the options will total $38 million if Amazon buys at least $150 million worth of products and services from Kornit.
Founded in 2002, Kornit is controlled by Fortissimo Capital. In April 2015 the company raised $71 million at $10 per share at its Nasdaq IPO. The company has about 400 employees.
“We are excited to have been selected as a garment printing solution provider for Amazon, and look forward to the business potential this relationship represents, ” said Gabi Seligsohn, CEO of Kornit. “We believe that Amazon’s decision is great testament to Kornit Digital as forefront of the digital direct-to-garment market.”
“Customer demand for graphic t-shirts offered through Merch by Amazon continues to grow rapidly, and more developers and content creators join the service every day, ” said Miguel Roque, Director, Merch by Amazon. “Kornit’s ability to deliver solutions and support that meet our high quality and high volume manufacturing requirements will help us to continue expanding program capacity to meet customer requests.”