SYDNEY, AUSTRALIA: dusk Group , an Australian specialty retailer of home fragrance products,  has agreed to acquire 100% of Eroma Group for an Enterprise Value of $28 million.

Consideration comprises $15m in cash and a $13m placement of ordinary shares in dusk, issued to all Eroma shareholders, including
Shane McGrath, majority (55%) shareholder and Eroma CEO/founder.

Eroma will continue to operate as a standalone business within dusk Group, led by Shane McGrath (CEO).

Eroma is a supplier of a complete range of home fragrance component parts (and some finished products), candle making kits and bath & body products.

95% of orders are placed online. Eroma has over 30,000 active customers (LTM). Customer database is very broad and growing, with low levels of key customer dependency.

The acquisition is complementary to dusk’s existing offering and provides the dusk Group with strong growth potential:

─ Enables dusk to increase its Total Addressable Market (“TAM”) through acquiring an adjacent but non-competitive leader in the ‘small maker supplier segment’
─ Eroma is a largely online business, which will enhance dusk’s online presence and complements its physical retail offering. dusk
also adds ‘OTC’ capability to Eroma
─ The Acquisition presents both geographic and range expansion opportunities via shared facilities, industry knowledge, customer insights and relationships
─ Increases buying power for common input costs and unlocks an in-house ‘made in Australia’ supply opportunity for dusk candles and fragrances / essential oils
─ Eroma has also developed and owns the recipe (IP) for over 900 fragrance formulations, which gives Eroma a unique market position in Australia and provides dusk with a large catalogue of fragrance formulations to draw upon quickly and test
─ National network of distribution facilities provides both businesses with more options for greater operational efficiency in distribution and faster delivery to customers in more remote geographies (e.g. Perth, FNQ and New Zealand)
─ Eroma is led by a strong management team with deep industry knowledge, committed to the continued success of the business
─ Highly EPS accretive acquisition which creates a larger, more diversified group with increased exposure to growing segments and channels.