Amazon aggregators Branded and Heyday plan to merge, CNBC has learned, as a segment of the e-commerce industry that boomed during the Covid era continues to consolidate.

In a note to staffers on Monday, Heyday CEO Sebastian Rymarz said the combined companies will form a new entity called Essor, which translates to "take flight" in French, "capturing our vision of elevating brands to new heights through our platform," he wrote.

The new name will be officially rolled out in the coming days, and the combined companies are expected to generate annual revenue of $400 million, Rymarz wrote.

Apollo Global Management and BlackRock are in talks to provide new debt financing to help the combined entity make further acquisitions, according to Bloomberg, citing people familiar with the matter.

"The merger is the culmination of an effort that began well over a year ago to find a partner who could help advance our mission, accelerate progress toward our goals and strengthen our balance sheet, as we've spoken about in the past," Rymarz said. "Branded is the perfect partner."

Representatives from Heyday and Branded didn't immediately respond to requests for comment. BlackRock declined to comment, and Apollo didn't have an immediate response.

In connection with the merger, Heyday is expected to conduct a massive round of layoffs that could result in up to 70% of employees losing their jobs, according to a person familiar with the matter who asked not to be named because the cuts haven't been announced. Branded will absorb Heyday's technology team, and several brands, the person said, including skincare line ZitSticka and Boka, which makes fluoride-free toothpaste and other dental care products.

Heyday and Branded are part of the crowded and turbulent market of Amazon seller aggregators. Companies in the space took advantage of low interest rates and pandemic-driven growth in e-commerce to collectively raise more than $16 billion from top names on Wall Street and in Silicon Valley with the intent of rolling up independent sellers on Amazon's marketplace. Aggregators caught the attention of high-profile investors like L Catterton, BlackRock, and even Jared Kushner's Affinity Partners.

Cracks began to appear in 2022 as venture funding dried up for cash-burning startups and e-commerce demand cooled with consumers returning to physical stores. Aggregators were suddenly struggling to profitably operate the brands they acquired.

Former highflier Thrasio, an early leader in the aggregator space, filed for bankruptcy in February and lost several key executives. Consolidation among aggregators has accelerated over the past year. Prior to the deal with Paris-based Branded, Heyday explored a possible tie-up with Dragonfly, whose backers include L Catterton, before the talks fell apart, CNBC previously reported.

WATCH: What's behind the hype and billion-dollar aggregators buying Amazon sellers