SYDNEY, AUSTRALIA: Nuchev Limited (Nuchev) has officially declared its agreement to acquire all shares of bWellness Pty Ltd (bWellness), a leading distributor of high-efficacy health products.

The acquisition, valued at $7.0 million, is structured on a cash-free, debt-free basis, with the consideration comprising equally of Nuchev scrip and cash.

The cash component includes an 80% upfront payment of $2.8 million upon completion, and the remaining 20% ($0.7 million) is to be paid after 12 months, contingent on performance and key personnel retention.

This strategic move aligns with Nuchev’s growth ambitions, promising to more than double the previous fiscal year’s revenue, add approximately 200 new health and wellness products to its portfolio, and significantly improve operating cashflows.

The purchase price is approximately 4.3 times the enterprise value to normalized FY23 EBITDA before synergies, or about 3.3 times post-synergies.

To fund the cash consideration, Nuchev is launching a $5.1 million pro-rata entitlement offer, issuing one fully paid ordinary share for every 2.75 shares held by eligible shareholders at an offer price of $0.156.

The offer has garnered robust support from key investors, including full commitments from H&S Investments and partial commitments from Nuchev’s founder Ben Dingle and director Craig Silbery.

The record date for the entitlement offer is set for 7:00 pm on Friday, 24 May 2024, with the offer opening on Monday, 27 May 2024. Should the offer be fully subscribed, Nuchev anticipates a pro forma net cash position of approximately $7.5 million.

The acquisition is a strategic fit for Nuchev, allowing it to leverage its existing organizational structure, supply chain, marketing, and finance functions. It also aligns with the company’s strategy to build a diversified portfolio of profitable and sustainable businesses that deliver nutritional health and dietary benefits.

The deal involves an associate of H&S Investments and H&S International, with Brauer Natural Medicine Pty Ltd, a 50% shareholder in bWellness, agreeing to take scrip consideration for its holding, which will be escrowed for two years post-issuance.

The acquisition and issuance of consideration shares are subject to shareholder approval at the Extraordinary General Meeting scheduled for Wednesday, 19 June 2024.

Nuchev Limited also announce the appointment of Mick Myers as Chief Executive Officer. Mick has been acting as Interim CEO and CFO since November 2023.