TIDMVLG
RNS Number : 9541A
Venture Life Group PLC
07 June 2021
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 which is part of UK law
by virtue of the European Union (Withdrawal) Act 2018.
For immediate release
Venture Life Group PLC
("VLG" or the "Company")
Acquisition of BBI Healthcare Limited
Venture Life Group PLC (AIM: VLG), a leader in developing,
manufacturing and commercialising products for the international
self-care market, announces that is has acquired BBI Healthcare
Limited ("BBIH"), a global market leading Women's Health and Energy
Management/Diabetes company, for a total consideration of up to
GBP36.0m. The acquisition of BBIH, which is expected to be
immediately earnings enhancing, is from BBI Diagnostics Group
Limited (the "Seller"), a company ultimately majority owned by
Exponent Private Equity.
The Board consider the acquisition of BBIH is one of high
strategic value for VLG. BBIH joins the VLG Group as a growing and
profitable business in its own right as well as presenting the
opportunity for meaningful cost and revenue synergies to be
realised. Furthermore, and of significant strategic value to VLG,
the acquisition of BBIH establishes VLG in two new high interest
areas of Women's Health and Diabetes/Energy Management.
BBIH and its subsidiaries, headquartered in Crumlin, South
Wales, has a manufacturing facility in Gnesta, Sweden, employs 21
people across the UK and Sweden and benefits from a strong
management team, the majority of whom will transition to VLG as
part of the acquisition.
BBIH produces and markets products within two key consumer
healthcare segments of Women's Health and Diabetes/Energy
Management. In Women's Health, BBIH has the Balance Activ (â) brand
for the treatment of bacterial vaginosis ("BV") and also sells this
product under customer brand names through a number of
international partners. In Diabetes/Energy Management BBIH has two
brands of glucose supplements: Glucogel (â) , which is prescribed
for hypoglycemia and Lift (â) , which is a range of glucose gels,
shots and chewable tables.
Balance Activ is the leading UK brand for the BV indication by
volume and Glucogel is the number one glucose gel prescribed in the
UK for hypoglycemia. Balance Activ and Lift are sold directly to
retailers in the UK, including Boots, Superdrug and Tesco, as well
as being available for purchase on Amazon UK. Glucogel is primarily
sold through pharmacy chains and independent pharmacies throughout
the UK. BBIH owns all the IP associated with these brands and its
products are currently sold or partnered across 27 countries. The
BV product has historically been sold as a gel but BBIH has
recently developed and launched a nascent patented pessary
formulation of the product.
Balance Activ is also sold through a number of well-known
partners internationally under customers' brand names, where the
product is currently marketed in 25 countries. In addition, BBIH
recently developed a new Women's Health product, and in April 2021
signed a new agreement with a prominent international partner for
the distribution of this product to be launched under their own
well-known brand in a number of countries (in Europe, USA &
China). The first orders for this product have already been shipped
in H1 2021.
For the year ended 31 December 2020, BBIH generated adjusted
EBITDA of GBP2.6m (reported EBITDA GBP2.3m) on revenues of
GBP10.2m. Net assets at 31 December 2020 were GBP2.4m. During the
last quarter of 2020 and the first half of 2021, a number of areas
of new business were put in place at BBIH that, whilst not
impacting the 2020 numbers, the Board of VLG expects to deliver
meaningful impact during 2021 through revenue growth and a
corresponding material positive impact on 2021 profitability.
Amongst other things, this revenue growth is expected to be
generated from the nascent BV patented pessary product and the new
Women's Health product, as they launch with partners in new
territories. In addition to these recent product initiatives, the
VLG Board has identified a number of immediate post acquisition
cost synergies that are expected to further enhance BBIH's
profitability as part of VLG. The Board also expects the Group to
benefit from future cross selling opportunities between BBIH and
the existing VLG products and customers.
The Board of VLG considers that BBIH is highly complementary to
VLG's strategy, fits well with VLG's stage of development and will
propel VLG to a leader in the Women's Health and Energy
Management/Diabetes categories. The Board believes that VLG will be
able to derive significant benefits from applying the operating
leverage it has within the Company to BBIH and that the acquisition
is consistent with the Group's long held strategy of growth by both
organic and acquired means.
The total consideration payable is up to GBP36m made up of
GBP35m in cash on completion (being GBP25.4m in respect of the BBIH
shares and the balance by way of payment of amounts due to the
Seller), and deferred consideration of a further GBP1m, payable to
the Seller on receipt of FDA approval for the new Women's Health
product for the US market. The consideration will be funded from
VLG's existing cash resources. The Company expects to have a
revolving credit facility in place shortly after completion of the
transaction.
Jerry Randall, CEO commented : 'I am delighted to announce the
acquisition of BBIH. This is a strong and significant strategic
acquisition, and is expected to be immediately earnings enhancing
for VLG.
BBIH is a well-established, growing and profitable consumer
healthcare business, with a strong offering both of its own brands
and also customer brands. Products are currently sold or partnered
in 27 countries, with a significant direct-to-retail presence in
the UK, which will add to the already significant direct-to-retail
presence VLG has in the UK.
We are conscious that the headline purchase multiple against
BBIH's 2020 EBITDA appears higher than our normal target, however,
this is a strategic acquisition for us, and both I and the Board
believe we have achieved value for money; we have acquired a
growing business with multiple new revenue initiatives that are
already impacting 2021 as well as a business where we have
identified immediate cost savings to derive further value and one
that soundly establishes us in two new verticals. In addition to
this, we expect to realise attractive revenue synergies. It is,
therefore, our expectation that adjusted for a full year effect of
immediate cost savings (and before we have achieved any revenue
synergies), the acquisition would represent a high single digit
EV/EBITDA multiple for FY21 and we expect further revenue growth in
2022 and beyond.
The business comes with its own manufacturing facility in Gnesta
(near Stockholm), Sweden, which manufactures the BV gel product.
This facility has been heavily invested in by the Seller and
possesses fully automated production machinery that is currently
running at circa 20% capacity. This facility has significant
capacity for volume growth and provides VLG the opportunity to
increase output to meet and generate new business.
The acquisition will initially utilise the cash raised in
December 2020 and afterwards we intend to put in place a revolving
credit facility to repatriate some of the cash back onto our
balance sheet, which will still leave significant firepower in our
resources for further acquisitions, such as Project Vulcan, which
is still in progress and we expect to update the market on soon. We
are very grateful for the support shown by both our existing and
new shareholders in our placing in December 2020, which, by virtue
of the cash it put in our balance sheet, enabled VLG to enter into
discussions to acquire this exciting business, which we otherwise
would have been precluded from. This is validation of our strategy
that, armed with cash on our balance sheet, we can be successful in
acquiring attractive assets. This exciting and growing business is
primed for more growth in our hands."
For further information, please contact:
+44 (0) 1344
Venture Life Group PLC 578004
Jerry Randall, Chief Executive Officer
+44 (0) 20 7397
Cenkos Securities plc (Nomad and Joint Broker) 8900
Michael Johnson / Russell Kerr (Sales)
Stephen Keys / Camilla Hume (Corporate Finance)
+44 (0) 20 7496
N+1 Singer (Joint Broker) 3000
Jonathan Dighe (Sales)
Shaun Dobson / Steven Pearce (Corporate Finance)
FTI Consulting
Kit Dunford |+44 (0)7717 417 038 | kit.dunford@fticonsulting.com
Katherine Bell | +44 (0)7976 870 961 | katherine.bell@fticonsulting.com
About Venture Life ( www.venture-life.com )
Venture Life is an international consumer self-care company
focused on developing, manufacturing and commercialising products
for the global self-care market. With operations in the UK, The
Netherlands and Italy, the Group's product portfolio includes some
key products such as the UltraDEX and Dentyl oral care product
ranges, food supplements for maintaining brain function, medical
devices for women's intimate healthcare, fungal infections and
proctology, and dermo-cosmetics for addressing the signs of
ageing.
The products, which are typically recommended by pharmacists or
healthcare practitioners, are available primarily through
pharmacies and grocery multiples. In the UK and The Netherlands
these are supplied direct by the company to retailers, elsewhere
they are supplied by the Group's international distribution
partners.
Through its Development & Manufacturing business in Italy,
Biokosmes, the Group also provides development and manufacturing
services to companies in the medical devices and cosmetic
sectors.
Forward-looking Statements
This news release contains forward -- looking information. The
statements are based on reasonable assumptions and expectations of
management and VLG provides no assurance that actual events will
meet management's expectations. In certain cases, forward --
looking information may be identified by such terms as
"anticipates", "believes", "could", "estimates", "expects", "may",
"shall", "will", or "would". Although VLG believes the expectations
expressed in such forward -- looking statements are based on
reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those projected.
Company website
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END
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