IN BRIEF: Wellnex Life soars on up to AUD21 million Pain Away sale
Wellnex Life Ltd - Melbourne-based consumer healthcare products company - Enters formal binding agreement to sell 'Pain Away' business and assets to Mentholatum Australasia Pty Ltd, for up to AUD21.3 million in cash. Mentholatum's parent firm is Japanese FMCG and pharmaceutical company Rohto Pharmaceutical Co Ltd. Consideration consists of AUD19.8 million payable upon completion, followed by an up to AUD1.5 million earn-out subject to threshold and target normalised earnings before interest, tax, depreciation and amortisation performance of the business in the year following completion. Wellnex intends to use the proceeds to retire all of its borrowings totalling around AUD10.2 million, with leftover funds going towards working capital and potentially other growth initiatives, as well as a potential capital return to shareholders. Wellnex will convene a general meeting seeking shareholder approval on September 8, aiming to complete the sale "shortly" afterwards. Expects the proceeds to leave it debt-free upon completion.
Interim Executive Chair Eric Jiang comments: "This transaction represents an important step for Wellnex Life, strengthening the company's balance sheet and providing greater financial flexibility. Pain Away has been an important part of the company's portfolio and the board believes the transaction provides a clear route to realise value from the brand while supporting the company's strategic priorities. In Mentholatum, the brand passes to a global consumer healthcare group which is well positioned to support its future development."
Current stock price: 5.00 pence, closed up 54% on Thursday in London
12-month change: down 68%
By Emma Curzon, Alliance News reporter
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