Shares in Wellnex Life Ltd (ASX:WNX, AIM:WNX) soared 115% to 7p in early trading on Thursday after the consumer healthcare group agreed to sell its Pain Away brand for up to A$21.3 million in cash.
The buyer is Mentholatum Australasia, part of the Japanese pharmaceutical group Rohto, which is listed in Tokyo.
Wellnex, quoted on both AIM and the Australian market, will receive A$19.8 million on completion, with a further A$1.5 million payable if the brand hits earnings targets over the following 12 months.
The proceeds will clear the company's entire debt pile of about A$10.2 million, leaving it free of borrowings.
That includes loans from former directors that were due for repayment at the end of this month, now deferred until the deal closes at no extra cost.
Pain Away is a topical pain relief range and one of Wellnex's flagship assets.
It generated revenue of A$13.38 million and earnings before interest, tax, depreciation and amortisation of A$4.36 million in the year to June 2025, on unaudited figures.
Gross assets stood at A$22.76 million at the end of last year.
The sale follows unsolicited approaches for the brand from separate parties in February, alongside a proposal to fund its international expansion through convertible notes.
The board concluded a cash sale was the best outcome available to shareholders.
Remaining funds will go towards working capital, growth initiatives and possibly a return of capital to shareholders, with a decision to follow completion.
Wellnex will retain its liquid soft gel painkiller business and its contract manufacturing arm, which it describes as capital-light with growing international reach.
The company said it would look at acquiring established consumer brands with proven distribution and attractive margins.
Wellnex has agreed not to compete with Pain Away in Australia or New Zealand for five years.
The deal requires shareholder approval under AIM rules because of the size of the business being sold relative to the company.
A general meeting is set for 8 September, with completion expected shortly afterwards.
Eric Jiang, interim executive chairman, said the transaction provided a clear route to realise value from the brand.
