William Ransom buys aloe vera leader Optima for £23m
buy Optima Healthcare, the UK market leader in aloe vera brands,
and its Irish subsidiary for £23 million (€34.3m), reports
Dominique Patton.
The deal is the largest of six acquisitions made by Ransom in the last four years.
The company's manufacturing activities are focused around botanicals, producing extracts for the food and beverage, pharmaceutical and cosmetic industries.
But it has been buying up established natural product brands, including the leading glucosamine brands with the purchase of Health Perceptions last year, under a new strategy to become the UK's leading natural product business.
"Ransom has now established the base for building a substantial consumer healthcare business," it said in a stock exchange statement today.
The larger group, which now owns the UK's leading glucosamine and aloe vera brands, will be better able to respond to mass market pressure, offering retailers "a one-stop shop" for a range of natural healthcare lines.
"The breadth of the combined ranges will allow the enlarged group to offer direct account trading terms to larger independent retailers - both pharmacists and health food stores - which should generally allow improvedprofit margin for both the retailer and enlarged group," Ransom said.
The acquisition should also generate opportunities for cross-selling. Ransom is relatively strong in key grocery accounts and in multiple and independent chemists, while Optima's strength is with multiple and independent health food retailers.
The deal is expected to be earnings enhancing before synergies.
Cardiff-headquartered Optima, also one of Europe's leading suppliers of retailed aloe vera cosmetics and drinks, reported adjusted profit before tax of approximately £2.9 million in 2004, up from £2.0 million the prior year. Turnover of around £13.9 million grew by 16 per cent on 2003.
The business has continued to perform well in the firsthalf of 2005 and this performance should continue under new ownership, said Ransom. It may also bring some of Optima's manufacturing, currently contracted out, in-house to improve profit margins.
Ransom also reported financial results for the year to 31 March today, highlighting a 31 per cent rise in turnover from continuing operations to £18.9 million.
Much of the growth came from Health Perceptions - sales rose 27 per cent to £6.8m since the acquisition in April - as the rest of the firm's business was hit by its sales agent going into administration.
The new acquisition constitutes a reverse take-over under the rules of the AIM (alternative investment market) and is therefore subject to the approval of shareholders, which will be sought at an extraordinary general meeting. An application will be made to the London Stock Exchange for the existing shares to be readmitted, and for new shares to be admitted, to trading on AIM.
Optima's founders Fred Whitcomb and Steve Quinn will join the board along with David Wilkie, founder of Health Perceptions.
