Australian Pharmaceutical Industries Limited (ASX: API) has acquired Clearskincare Clinics for $127.4 million.
The acquisition, to be paid for over three years, will see API acquire all the assets of Clearskincare Clinics, including 42 clinics in Australia and two in New Zealand.
Clearskincare Clinics is a leading Australian provider of non-invasive aesthetic services such as laser hair removal, skin treatments, and cosmetic injectables.
API, the parent company of Priceline Pharmacy, will also acquire Clearskincare Clinics' exclusive skincare product range.
API managing director and CEO Richard Vincent says the acquisition complements the company's strategic direction to grow further into the beauty sector.
"The Acquisition fulfils our criteria for aligning with a robust business in a burgeoning sector of the health and beauty market, that is services-based and away from government funding, and to which we can add further value for customers, clinic teams and shareholders," says Vincent.
"We expect to build scale and profitability because of our operational capabilities in franchising, network development and consumer products management. Also, API's Priceline Pharmacy business and Clearskincare Clinics share the same core customers, which will enable us to leverage our marketing assets across both businesses."
The two founders of Clearskincare Clinics, Dr Philippa McCaffery and Alarna Longes, have agreed to continue to work at Clearskincare Clinics under API's ownership.
Clearskincare Clinics has a focus on specialty skin, anti-ageing, and acne treatments, which represent a significant proportion of its revenue mix. It has continued to invest in developing and introducing proprietary skincare products, particularly for anti-ageing and acne treatments.
From the initial two clinics in Jun 2005 to 44 clinics nationally, Clearskincare Clinics has grown to become one of the leading businesses in the beauty sector.
API expects the impact of the acquisition to be positive in FY19 and is expected to generate pro forma revenue and earnings of approximately $48 million and $14 million respectively in FY19.
Shares in API are set to open at $1.36 per share on Monday morning.
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