Natural beauty business BWX (ASX: BWX) is set to spend between $27.9-30.8 million for an Australian-curated online retail platform focused on vegan, ethical and sustainable products called Flora & Fauna.
The acquisition, due for completion in July 2021, will see Flora & Fauna join BWX and operate alongside the company's pure-play e-commerce business Nourished Life, forming a new business unit within the larger group.
Flora & Fauna founder and CEO Julie Mathers and her entire team of 47 employees will be joining the BWX business post-acquisition, adding to the new parent's portfolio which also includes skincare brands Sukin, Andalou Naturals, USPA and Mineral Fusion.
Founded in 2014 and based in Sydney, Flora & Fauna has 94,000 active consumers and is a leading online vegan retailer, with 300 brands across its multi-category offering that covers beauty, personal care, lifestyle, baby & kids, pet, food and health.
The acquisition target has a track record of sales growth, with FY20 revenue of $12 million, up from $10 million in FY19. Revenues for FY21 are forecast to be in the range of between $16.4-17.1 million
BWX CEO and managing director David Fenlon says the acquisition is in line with the group's omni-channel retail strategy and its direct-to-consumer online offering.
"With complementary categories and minimal consumer and SKU (stock keeping unit) overlap, the two brands will benefit from a strategic approach to consumer experience and promotions, as well as operational efficiencies," says Fenlon.
"We know that consumers are placing increasing value on two sustainable lifestyle choices, as well as direct-to-consumer convenience.
"With these two fast growing online platforms, BWX intends to remain at the forefront of the global wellness revolution and is focused on continuing to evaluate opportunities further to enhance and grow its direct-to-consumer offering."
As a retailer specialising on selling goods that are positive for the environment, Flora & Fauna tries to be as sustainable as the items on its site.
The company offsets all carbon emissions, and in 2017 became achieved Certified B Corporation status, meaning it meets the highest standards of verified social and environmental performance, public transparency and legal accountability to balance profit and purpose.
Mathers, who has extensive experience in the Australian retail space, says it is important that future investors in the business were completely aligned with Flora & Fauna's purpose-driven values.
"This is a really exciting step for Flora & Fauna and the wider industry," she says.
"BWX offers Flora & Fauna the opportunity to grow even further as a business with strong alignment about having a positive impact on the planet, people and animals.
"I am a firm believer in giving customers the best experience while operating purposeful businesses that are built on nimble, innovative retailing and world-class metrics and I look forward to continuing, and building on, this approach as part of the BWX team."
The acquisition will be fully funded through a debt facility provided by the company's lender.
Shares in BWX are up 2.83 per cent to $4.72 per share at 11.33am AEST.
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