Alliance Pharma plc (LON:APH) is acquiring a pesticide-free head lice product line for up to US$17.5mln – giving the growing healthcare company a third international brand.
It is paying an initial US$13mln for Vamousse, which it is acquiring from TyraTech plc, the AIM-listed developer of the range. This will be followed by a deferred pay-out of as much as US$4.5mln based on sales targets.
The earnings enhancing deal should be completed by the end of the year.
Using existing infrastructure
“Vamousse will leverage our current infrastructure as it fits well into our growing UK consumer business, whilst expanding our footprint into the US,” said Alliance chief executive John Dawson.
“The brand will also benefit from added distribution both through our EU affiliates and through our international partner network operating in over 90 territories worldwide."
In the last full financial year Vamousse’s mousses and shampoos generated sales of US$6.6mln and a gross profit of US$4.6mln. In the latest six months revenues were US$3.3mln and gross profit US$2.3mln.
US focused
A total of 83% of the turnover came from the US, with the remainder generated in the UK.
"We are delighted to acquire the innovative consumer healthcare brand Vamousse, which will become our third major international growth brand,” said Alliance CEO Dawson.
“The acquisition will be immediately earnings enhancing and expected to be accretive to our return on invested capital from the second year.”
The sale of Vamousse should provide a significant boost to shares in Tyratech as the initial consideration being handed over by Alliance is US$3mln more than the AIM firm’s current market capitalisation.
Tyratech has said it will use US$8.5mln of the proceeds to buy back its stock for 3 pence a share – which is more than double Friday’s close.