Hotel Chocolat Group PLC (LON:HOTC) announced it has agreed to acquire the remaining part of a joint venture Rabot 1745 Ltd for £4mln.
Rabot was established in 2016 as a joint venture between the chocolatier and its non-executive chairman Andrew Gerrie to develop a range of beauty products inspired by its Saint Lucian cacao farm and rainforest spa.
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The firm is incorporating it to further develop the brand's intellectual property.
Hotel Chocolat and Gerrie own 47% and 40.5% respectively of Rabot, with the rest held by non-related parties.
Hotel Chocolat will buy Rabot's inventories and other assets, as well as liabilities including an outstanding loan amount owed to Gerrie totalling £744,249, to be paid back through new shares in the company. His stake will be 0.55% thereafter.
The 203,903 shares, which will start trading on AIM on Wednesday, were calculated based on the stock’s closing price on 16 June, the last trading day before the deal was negotiated.
The group will have 125mln shares in issue once the transaction is completed.
For the financial year ended 30 June 2020, the joint venture reported a net loss after tax of £400,000. Following the acquisition, its assets will be £700,000 with liabilities of £900,000.
Analysts at house broker Liberum said that the move to full ownership will allow the group to continue to develop its award-winning beauty range, “which is particularly popular across its UK channels, St Lucia and Japan”.
It will also support an ongoing brand-enhancing, which is a point of differentiation compared to other chocolate players, as well as potentially see Rabot begin to turn a profit with the integration.