SYDNEY, AUSTRALIA: Wellnex Life Limited (ASX:WNX), a leading consumer healthcare company, has announced that it has entered into a binding agreement to acquire the business and assets of Pain Away Australia Pty Ltd, one of Australia’s leading topical pain relief brands.
Pain Away offers a range of natural and clinically proven products for muscle and joint pain relief, including sprays, creams, roll-ons and patches. Pain Away generated revenue of $12.4m during the financial year ended 30 June 2022 (FY22) and is expected to generate $13.7m for the financial year ended 30 June 2023 (FY23B).
The acquisition is highly complementary to Wellnex’s position in the consumer healthcare industry and adds immediate scale to Wellnex’s portfolio of healthcare brands and products, enhancing its competitive position. Pain Away is expected to be a highly profitable business under the ownership of Wellnex; Pain Away’s contribution to FY23B EBITDA of the consolidated entity is $5.1m on a pro forma basis, after accounting for anticipated add-backs, synergies and other savings.
The total purchase price of $22.0m (including $1.15m of inventory at cost) payable in cash represents an attractive valuation of 1.5x EV/FY23B Revenue and 4.1x EV/FY23B pro forma EBITDA. Wellnex intends to fully fund payment of the purchase price through equity financing.
The acquisition is subject to satisfaction of certain customary conditions by no later than 31 July 2023.
George Karafotias, Chief Executive Officer of Wellnex, said: “Pain Away is a well-known and growing brand that has consistently achieved strong revenue growth and consistently high gross margins. What is really exciting about Pain Away is the opportunity to accelerate growth of the existing portfolio into grocery and international markets, whilst extending the brand into new categories in the market, such as pet health. The brand is also perfectly aligned to our medicinal cannabis strategy with our focus on pain relief.”
He added: “We have completed an extensive due diligence program with the assistance of RSM (financial DD) and Holding Redlich (legal DD) and are confident in the quality of the business and assets we are acquiring. We look forward to working with the Pain Away team to integrate the business into Wellnex and deliver on our growth plans.”
According to Wellnex, Pain Away has a loyal customer base of over 1 million Australians and is sold in over 6,000 pharmacies across Australia. Pain Away also has a growing presence in international markets, including New Zealand, China, Hong Kong, Taiwan, Singapore and Malaysia.
Wellnex is a consumer healthcare company that offers a range of natural and clinically proven products for various health needs, such as beauty, sports nutrition, healthy aging and metabolic balance. Wellnex also has a pipeline of medicinal cannabis products that are expected to launch in Australia in 2023.
On a consolidated post-transaction basis, total revenue for FY23B is expected to be $42.5m and is forecast to grow c.48% year-on-year to reach $62.9m during FY24B, with consolidated EBITDA for FY24B of $9.0m.