- Health and beauty products supplier McPherson’s (MCP) has proposed to acquire Blackmores’ (BKL) subsidiary, Global Therapeutics, for $27 million
- Global Therapeutics develops and sells Oriental and Western herbal and complementary medicines across Australia and New Zealand
- The deal aligns with McPherson’s strategy of expanding its portfolio and customer offering
- To fund the acquisition and to strengthen its balance sheet, McPherson’s has launched a fully underwritten institutional placement to raise $36.5 million
- In addition, it will offer eligible shareholders a share purchase plan to raise up to $10 million
- McPherson’s is still in a trading halt with shares last trading for $2.47 on Monday, October 26
McPherson’s (MCP) is set to acquire Blackmores’ (BKL) subsidiary, Global Therapeutics, for $27 million.
The health and beauty products supplier entered a trading halt earlier this morning ahead of the acquisition announcement which is being accompanied by a $36.5 million equity raising.
Acquisition
Global Therapeutics is based in Byron Bay, New South Wales, and develops and sells Oriental and Western herbal and complementary medicines across Australia and New Zealand. The formulations are sold through its premium Fusion Health and Oriental Botanicals brands.
McPherson’s considers the proposed acquisition to be highly complementary to its growth strategy and will likely provide ‘meaningful’ revenue and operational benefits through brand investment, channel expansion, export focus and collaboration efficiencies.
Global Therapeutics has a highly-qualified team with health food store and pharmacy distribution experience who will transition to McPherson’s to help execute the company’s health and wellness strategy.
“Building on McPherson’s 160-year rich history and our strategic focus on Health, Wellness and Beauty categories, has recently seen us establish a new Health and Wellness Division within McPherson’s,” Managing Director and CEO Laurence McAllister said.
“We believe the heritage and culture of Global Therapeutics will be an extremely strong fit with McPherson’s,” he added.
Global Therapeutics achieved net revenue of around $20 million in the 2020 financial year and normalised earnings before interest and taxes (EBIT) of $3.7 million.
The acquisition is expected to be completed by November 30 2020. Following this, Blackmores will give McPherson’s a range of transitional services to support the integration of Global Therapeutics.
Equity raising
To fund the acquisition and to strengthen McPherson’s balance sheet for future acquisitions and growth initiatives, the company has launched a fully underwritten institutional placement to raise $36.5 million.
Around 16.1 million shares will be issued at $2.27 per share. The issue price represents an 8.1 per cent discount to the last closing price of $2.47 on Monday, October 26 and a 13.7 per cent discount to the five-day volume-weighted average price of $2.63.
The placement is fully underwritten by Moelis Australia Advisory who are acting as sole lead manager, book runner and underwriter.
The placement is expected to be completed on Wednesday, October 28 and new shares are expected to settle on Friday, October 30 and be allocated from normal trading on Monday, November 2.
In addition to the placement McPherson’s is looking to raise a further $10 million through a share purchase plan. Eligible shareholders may subscribe for up to $30,000 of new shares without incurring transaction or brokerage costs.
The share purchase plan will open on Friday, October 30, will close on Tuesday, November 24 and will be issued on Thursday, November 26.
McPherson’s is still in a trading halt, with shares last trading for $2.47 on Monday, October 26.