Wal-Mart lost out on Marc Lore when he was selling diapers. This time, the giant retailer was determined not to whiff.
On Monday, Wal-Mart announced the $3.3 billion acquisition of e-commerce upstart Jet.com, and named Lore, the company's co-founder and CEO, as head of online retail. It's a hefty price to pay — the most ever in e-commerce — for a 2-year-old company that's been burning millions of dollars a month and is nowhere near turning a profit.
But Wal-Mart wasn't going to miss this opportunity. Not after what happened six years ago, when Lore's start-up Quidsi, the parent of Diapers.com, was snapped up by Amazon.com for $545 million following a bidding war.
JPMorgan Chase, Wal-Mart's financial advisor then and now, was equally committed to aggressively closing the deal after missing out on Quidsi, according to sources familiar with the matter.
Unlike in 2010, when Wal-Mart was up against Amazon as well as Walgreens in the bidding, there was no competition for Jet, sources said. Lore had spoken with other potential strategic investors because he knew Jet would require deep-pocketed financiers for years to come, but Wal-Mart was alone in pursuing an acquisition, said the sources, who asked not to be identified because the talks were confidential.
Lore didn't respond to a request for comment, and a representative from JPMorgan declined to comment. Randy Hargrove, a spokesman for Bentonville, Arkansas-based Wal-Mart, said he doesn't have perspective on the Quidsi deal and that "Marc's reputation speaks for itself."
Hargrove reiterated comments that CEO Doug McMillon made on a conference call on Monday.
"Marc's e-commerce experience and success are obviously attractive," McMillon said from Walmart.com's headquarters in San Bruno, California. "What he has built at Jet and his mindset at Jet does have application at Walmart, and that's really what led us to make the decision to let Marc be responsible for both Walmart and Jet."