TIDMVLG
RNS Number : 1756I
Venture Life Group PLC
01 December 2022
1st December 2022
VENTURE LIFE GROUP PLC
("Venture Life" "VLG" or the "Company")
Acquisition and trading update
Venture Life (AIM: VLG), a leader in developing, manufacturing
and commercialising products for the self-care market, announces
that is has acquired three new Ear-Nose-Throat ("ENT") brands (the
"Brands") through the acquisition of the entire issued share
capital of the UK based company, HL Healthcare Limited ("HL") for a
total consideration of GBP13.0 million.
The total consideration of GBP13.0 million will be settled by an
initial cash consideration of GBP8.0 million, GBP3.0 million
contingent consideration based on revenue performance for the year
ending 31 March 2023 and the issue of a GBP2.0 million subordinated
loan note, due to mature in 2024. The cash consideration assumes HL
is cash and debt free other than normalised working capital, and is
subject to a completion accounts adjustment. The acquisition will
be funded from VLG's existing cash resources and its revolving
credit facility.
The Brands
The Brands, comprising of three approved ENT products (two
registered medical device spray products and one registered
cosmetic spray product) are:
-- An olive oil-based product with a patent protected spray
delivery system for the reduction and removal of ear wax, sold
under the trademarked brand names Earol, Vaxol and Audiol in
different territories;
-- An olive oil-based product with a patent protected spray
delivery system (plus some antibacterial components for the
protection of the ear surfaces when swimming), sold under the
trademarked brand name of EarolSwim; and
-- A saline product for nasal flushing sold under the trademarked brand name Sterinase.
The Brands are sold directly to wholesalers and retailers in the
UK and to licensing partners internationally, through a distributor
network across 23 countries located across Central and Eastern
Europe, Canada, and parts of the Middle East.
HL is the legal manufacturer of the Brands, which are made by a
UK third-party manufacturer. As part of this transaction, one
employee will be retained, and the founder will be supporting the
business post completion.
The largest of the Brands is Earol, which is a leading name in
the ear wax removal market ("EWR") and is the #1 brand in the UK
pharmacy and #2 brand in the UK grocery market for EWR.
Earol has experienced significant growth over the last 4 to 5
years due to EWR and general ear care transitioning away from
primary care to private audiology clinics. In the UK, The National
Institute for Health and Care Excellence (NICE) has, for several
years, recommended, on the British National Formulary, the use of
olive oil and Earol spray, in particular, for the management and
removal of ear wax. In addition to this, an ageing population and
technological advancements in hearing aids has increased the demand
for EWR and prophylactic ear care. The Earol product is delivered
with a patented single metered dose, contains only natural
ingredients and is alcohol free, thus it has no direct impact on
the functionality of hearing aids during use. International success
has mainly been in Scandinavia, driven by many consumers suffering
from dry skin conditions, which includes those of the ear
canal.
For the year ended 31 March 2022, HL generated reported EBITDA
of GBP1.7 million on revenues of GBP4.5 million. Net assets at 31
March 2022 were GBP1.7 million. Net profit after tax for the year
was GBP1.4 million. For the period 2018 - 2022 (31 March YE), HL
delivered revenue CAGR of 14.8% and current year trading is
on-course to achieve further growth.
Trading Update
VLG has signed a new long term distribution agreement with Blau
Farmaceutica ("Blau") in Brazil for the Gelclair product. The
launch is scheduled for the first half of 2023. Blau is the number
one pharmaceutical company in the non-retail market in Brazil, with
more than 1,500 employees and revenue of c.GBP270 million
(BRL1.4B). Actively present in the Institutional & Specialty
Care segments, Blau has more than 35 years' experience and has a
well-established footprint in the main LATAM markets, including
Argentina, Colombia, Chile, Ecuador, Peru and Uruguay. Blau's
expertise and complete line of Chemotherapy and Oncology Support
Products offers an established platform to successfully market
Gelclair in Brazil, in order to reach patients suffering from
chemotherapy or radiotherapy induced Oral Mucositis.
In addition, a new 5 year distribution agreement has been signed
for Gelclair with a partner in Vietnam and a new 5 year
distribution agreement has been signed for Balance Activ in
Ireland, with the launch taking place in early 2023.
The Board remains confident that the Group is on track to
deliver revenue and Adjusted EBITDA in line with market
expectations. Further detail regarding the FY2022 trading
performance and the outlook for FY2023 will be provided in the full
year trading update in Q1 2023.
This announcement contains inside information.
Jerry Randall, CEO commented : "In line with our existing buy
and build strategy, I am pleased to be further utilising our RCF in
acquiring the Brands via this acquisition of HL. HL has performed
extremely well and demand has risen despite the covid-19 pandemic
and ongoing supply chain pressures. Earol is already approved under
the new Medical Device Regulations (MDR), allowing us to focus on
continuing this growth in the UK and Europe. VLG is well positioned
to leverage its organisation to develop the Brands and their
profitability, to continue this channel growth and, in particular,
utilise both our UK retail and international distribution
relationships. In addition to growth of the existing product
portfolio, we have already identified several exciting new product
development opportunities; following an anticipated swift
integration, we look forward to exploiting the synergies and
leveraging the opportunities these acquisitions bring".
Mark Llewellyn, HL Founder commented: "We at HL Healthcare Ltd
are thrilled to join the Venture Life Group. At HL we have
designed, developed and distributed the Earol, EarolSwim and
Sterinase brands, which have brought significant clinical benefit
to many consumers. It fills me with great pride to know that
through VLG's professionalism, drive and ambition, as well as their
well-developed consumer sales, marketing and distribution network,
that the benefits of these products will be brought to a much
broader and diverse consumer market".
For further information, please contact:
Venture Life Group PLC +44 (0) 1344 578004
Jerry Randall, Chief Executive Officer
Daniel Wells, Chief Financial 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
Singer Capital markets (Joint Broker) 3000
Jonathan Dighe (Sales)
Shaun Dobson/Alaina Wong (Corporate Finance)
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, Italy,
The Netherlands and Sweden, the Venture Life Group's product
portfolio includes some key products such as the UltraDEX and
Dentyl oral care product ranges, the Balance Active range in the
area of women's intimate healthcare, the Lift and Glucogel product
ranges for hypoglycaemia, products for fungal infections and
proctology, and dermo-cosmetics for addressing the signs of ageing.
Its products are sold in over 90 countries worldwide.
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 two Development & Manufacturing operations in
Italy and Sweden, the VLG Group also provides development and
manufacturing services to companies in the medical devices and
cosmetic sectors.
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