TIDMAPH
RNS Number : 0578K
Alliance Pharma PLC
30 December 2020
The announcement below was first issued on RNS yesterday
afternoon at 3.01pm. It is being re-issued this morning at 7.00am
to ensure that all shareholders have an opportunity to see the
announcement, the text of which is unchanged.
For immediate release 29 December 2020
ALLIANCE PHARMA PLC
("Alliance" or the "Group")
Acquisition of Biogix Inc
Alliance completes an earnings-enhancing consumer healthcare
acquisition in the US, acquiring Biogix Inc, and the Amberen (TM)
brand for the relief of menopause symptoms
With a strong growth profile and run-rate net sales of
approximately US$27 million for 2020, Amberen will become
Alliance's second largest brand
Alliance Pharma plc (AIM: APH), the international healthcare
group, is pleased to announce that it has today completed the
acquisition of 100% of the share capital of Biogix Inc ("Biogix"),
a privately held, US-based consumer healthcare company, for a total
consideration of US$110.0 million (the "Acquisition") paid for in
cash from the Group's existing financial resources.
Highlights
-- The Biogix acquisition brings into the Group a highly
successful and fast-growing brand, Amberen, with significant
near-term growth potential
-- Amberen, for the relief of menopause symptoms, is a strong
brand in a new market segment for Alliance, within the fast-growing
vitamin, mineral, supplement market
-- Brings increased scale to our business in the US, the world's largest OTC market
-- Immediately earnings enhancing in FY 2021 and significantly earnings enhancing from FY 2022
Peter Butterfield, Chief Executive Officer of Alliance,
commented:
"As 2020 draws to a close, I am very pleased to be announcing
the successful completion of the Biogix acquisition, a substantial
and strategically important acquisition for Alliance, which
increases our presence in the US and in consumer healthcare.
"As an established, clinically evidenced brand with significant
sales and good growth potential, in a growing market, Amberen fits
perfectly with our strategy of acquiring established consumer
healthcare brands in territories where we already have a
presence.
"This Acquisition significantly enhances the scale of our
business operations in the US, the largest healthcare market in the
world, and provides the business with another great platform for
the delivery of future organic growth, alongside our key existing
brands; Kelo-cote (TM) and Nizoral (TM) ."
Introduction and overview of Biogix
The Biogix assets comprise a clinically evidenced range of
over-the-counter products for the relief of the symptoms of
menopause, and more recently perimenopause, both of which are
marketed under the brand name Amberen.
Amberen was launched in the US in 2007 and, since 2015, it has
gained strong retail distribution across multiple channels, such
that it is currently the primary driver of category growth in the
US(1) .
Biogix employs an outsourced, asset-light business model, with
all manufacturing activities being undertaken by third parties.
Post-acquisition, the Amberen business will be managed as part of
Alliance's existing US operations, and we look forward to welcoming
the existing small team who have been instrumental in the growth of
the brand to date. Alliance's main US operations will continue to
be based in Cary, North Carolina, with the Biogix office in Los
Angeles becoming the Group's west coast satellite office.
In the year ended 31 December 2019, Biogix achieved audited net
sales of US$22 million. On a run-rate basis, annualised net sales
for 2020 are expected to be approximately US$27 million, which
benefits from further distribution gains and the launch of the
perimenopause product, and a management-adjusted EBITDA expected to
be approximately US$7 million. As at 31 December 2019, Biogix had
net assets of US$5 million.
Strategic rationale
This Acquisition is fully aligned with the Group's strategy of
complementing organic growth from its existing, international
healthcare business with carefully selected acquisitions, focused
on clinically valuable, growing consumer healthcare brands in
territories in which it already has a presence.
The Acquisition has a number of key strategic benefits for
Alliance, specifically:
-- Amberen is expected to become Alliance's second largest brand
with its strong growth profile and current annualised sales of
around US$27 million
-- As demonstrated by its strong performance in 2020, Amberen
will meaningfully enhance Alliance's existing revenue and
EBITDA
-- It enables Alliance to expand its growing presence in the
important US market. Post completion, the US will represent
approximately 17% of Group revenues on a proforma basis up from 4%
in the year ended 31 December 2019
-- It increases the diversification of Alliance's product
portfolio, deepening the consumer healthcare brand offering. Post
completion, Consumer Healthcare will represent over 70% of Group
revenues on a proforma basis
-- It brings distribution channel synergy with Vamousse (TM) in
the US and also the potential to bid more effectively on future
consumer product acquisition opportunities due to the increased
scale of Alliance's US operations
-- It establishes a position for the Group in a new market
segment (menopause supplements) with significant near-term growth
potential
-- It strengthens the Group's e-commerce and digital marketing channel expertise and exposure
-- As a stand-alone entity, the Acquisition also benefits from limited integration complexity
Acquisition terms and financial impact
The Acquisition consideration comprises US$110.0 million payable
in cash on completion together with customary adjustments for
acquired cash, debt and working capital.
The Acquisition has been funded by a drawdown from the Group's
existing GBP165 million Revolving Credit Facility. Following this
drawdown, the total drawn facility will be approximately GBP141
million, with GBP24 million of the facility undrawn post
completion.
Group leverage (2) will increase to around 2.5 times at
completion, comfortably below our banking covenant of 3.0 times.
Leverage is expected to reduce to below 2.0 times by the end of FY
2021, reflecting the Group's continued strong cash generation, with
good cash flows from both the acquired business and the existing
Alliance business.
The Board expects the Acquisition to be earnings enhancing in
2021, after modest integration costs, and significantly earnings
enhancing from 2022 onwards, with further strategic benefits
anticipated in future years. The Acquisition is expected to deliver
a return on invested capital in excess of our WACC in the medium
term, before taking account of future revenue synergies from an
expanded US offering and a significant new brand with potential in
other markets.
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) prior to its release as part of this
announcement.
(1) Source: IRI MULO 52 w/e Aug 9, 2020
(2) Adjusted net debt / enlarged Group EBITDA, calculated using
pro forma EBITDA on a trailing 12 month basis
For further information:
Alliance Pharma plc + 44 (0)1249 466966
Peter Butterfield, Chief Executive
Officer
Andrew Franklin, Chief Financial Officer
www.alliancepharma.co.uk
Buchanan + 44 (0)20 7466 5000
Mark Court / Sophie Wills / Hannah
Ratcliff
Numis Securities Limited + 44 (0)20 7260 1000
Nominated Adviser: Freddie Barnfield
/ Huw Jeremy
Corporate Broking: James Black
Investec Bank plc + 44 (0) 20 7597 5970
Corporate Finance: Daniel Adams
Corporate Broking: Patrick Robb
About Alliance
Alliance Pharma plc (AIM: APH) is an international healthcare
group, headquartered in the UK with subsidiaries in Europe, the Far
East and the US and wide international reach through an extensive
network of distributors, generating sales in more than 100
countries.
We hold the marketing rights to around 80 Consumer Healthcare
brands and Prescription Medicines, which are managed on a portfolio
basis according to their growth potential. Promotional investment
is focused primarily on our Consumer healthcare brands, many of
which have significant international or multi-territory reach. Our
Prescription Medicines are generally sold in a more limited number
of local markets, and most require little or no promotional
investment.
Our strategy allows us to deliver good organic growth and to
enhance our growth rate through carefully selected
acquisitions.
For more information on Alliance, please visit our website:
www.alliancepharmaceuticals.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
ACQQKLFLBLLZFBX
(END) Dow Jones Newswires
December 30, 2020 02:00 ET (07:00 GMT)
Alliance Pharma (LSE:APH)
Historical Stock Chart
From Apr 2024 to May 2024
Alliance Pharma (LSE:APH)
Historical Stock Chart
From May 2023 to May 2024