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Highlights:
- Wellnex has signed a binding asset sale agreement to acquire 100% of Mr. Bright, the teeth whitening brand.
- The acquisition is subjected to necessary regulatory and shareholders’ approval.
- Backed by this update, Wellnex’s share price gained over 12% on Friday.
Leading health and wellness products seller Wellnex Life Limited (ASX:WNX) shares zoomed up on ASX, followed by the announcement regarding acquisition of teeth whitening brand Mr. Bright.
The shares of Wellnex were spotted trading 12.195% stronger at AU$0.092 per share as of 11:27 AM AEST on ASX on Friday.
Over last one year, Wellnex’s share price has fallen over 16% on ASX. Furthermore, Wellnex’s YTD-based share price dropped by 8% (as of 11:27 AM AEST on ASX Friday).
Details of Wellnex’s acquisition of Mr. Bright:
Wellnex announced that it has struck a binding asset sale deal to acquire 100% of Mr. Bright, the teeth whitening brand. However, the completion of the acquisition is subjected to regulatory and shareholders’ approval.
As per the agreement, Wellnex will be acquiring Mr. Bright for AU$1.5 million through ordinary shares of Wellnex at a minimum offer price of AU$0.10 per share or the 5-day VWAP price immediately after settlement, whichever is higher.
There are additional potential earnouts for FY23 and FY24, subject to EBITDA hurdles. Shares issued under the acquisition will be voluntarily escrowed as follows:
- 50% of shares escrowed for 12 months from issue.
- 50% of shares escrowed for 24 months from issue.
The company expects the settlement to take place immediately after its Annual General Meeting to be held in November 2022 and securing shareholder approval.
Things to know about Mr. Bright:
Founded in 2016, Mr Bright is a teeth whitening brand that is known for offering a variety of premium and effective take-home teeth whitening solutions. The company deploys the latest and high-tech safe dental technology to enhance the brilliant smiles of its consumers.
Mr. Bright claims that its’ products do not contain the commonly used harmful chemical such as hydrogen peroxide. Instead, the company uses components like glycerine, sodium bicarbonate and cranberry to deliver whitening agents deep into the tooth enamel.
Although Mr. Bright has strong distribution channels in the USA and UK, its products are not much popular in the Australian market. As a result, it is expected that Wellnex’s acquisition will help the brand to expand its distribution channels in Australia and eventually increase revenue and profitability.
Mr. Bright has experienced strong year-on-year growth with an EBITDA margin of circa 20%, which is further expected to rise as distribution channels expand after this acquisition. The company’s annualised revenue was circa AU$4 million, and normalised EBITDA for FY22 was circa AU$800,000, with continued growth in FY23 till now.
