GCIVenture Life Group acquires Health & Her for £7.5m, expanding women's health portfolio
Menopause and perimenopause are uncomfortable (hot flushes, night sweats) and occasionally debilitating conditions that affect hundreds of millions of people worldwide, usually between the ages of 45 and 55.
Those unfortunately impacted often take hormonal supplements and/or seek specialist support in order to alleviate the symptoms. In fact, a massively underserved market worth $16bn globally in 2023, and set to climb exponentially to $600bn by 2030 (Forbes), is driven by new treatments, greater awareness and telemedicine.
One company ideally positioned to benefit from this explosive growth is () , a consumer healthcare products firm that today purchased specialist menopause brand Health & Her (sales £6.1m, PBT -£0.4m) for £7.5m in cash (equivalent to 1.2x trailing EV/sales). Another £0.7m becomes payable if the founders stay with the business for 12 months, alongside a further £1.8m earnout contingent on future year 1 performance.
To me, H&H's hormonal wellbeing supplements and complementary educational support app fit perfectly with 's expertise in intimate women's health (re Balance Activ), supply chain strengths, and extensive retail footprint.
Sure, H&H is presently loss-making, meaning the transaction will initially be earnings dilutive. Yet far more importantly, the deal is highly 'value accretive' as there should ultimately be substantial cost and sales synergies derived from the deal, which should begin to kick in next year.
With regards to the numbers (prior to the transaction), house broker Cavendish (target price 68p/share) was forecasting FY24 turnover, EBITDA, PBT and adjusted EPS of £52.5m (£51.4m LY), £11.7m (£11.6m), £3.1m (£1.8m) and 5.5p (5.3p) respectively, climbing to £59.4m, £13.1m, £5.6m and 6.1p in 2025.
In turn, putting on modest FY24 multiples of 13.7x EV/EBIT and 9.0x PER, falling to 10.5x and 6.8x 12 months later. Elsewhere, I estimate net debt is set to close Dec'24 at around £18.7m or 1.6x EBITDA, reducing to 0.8x by Dec'25. In comparison, consumer healthcare peers Haleon and Kenvue trade on PERs of 21x and 20x.
CEO Jerry Randall commenting: "We are delighted to have acquired H&H, an exciting and dynamic business in the innovative area of supporting hormone change in men and women through all life stages. The business has been well invested in its growth and development, and we will be able to leverage all these assets going forward."
"Recent new launches into the US retail market and a deep pipeline of new products are expected to deliver meaningful growth in the short to medium term."
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