Ebos to buy Red Seal for $80m
The acquisition will be funded from existing debt facilities.
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Ebos Group [NZX: EBO], the animal and healthcare company, will expand its reach in the natural health products sector after agreeing to buy New Zealand vitamin and herbal tea maker Red Seal for $80 million.
The acquisition will be funded from existing debt facilities and Red Seal would add to per-share earnings immediately, said chief executive Patrick Davies.
"This transaction is part of our strategic expansion and diversification into areas where we believe there are attractive long-term opportunities for our group," Mr Davies said in a statement. Red Seal will add to Ebos's Endeavour Consumer Health division, which sells a range of branded natural health products in Australia and New Zealand, he said.
The transaction is expected to be completed on November 30 subject to conditions that Ebos didn't specify.
Red Seal's products include vitamins, minerals and supplements, herbal teas, non-fluoride toothpastes and functional foods, including molasses and manuka honey, Ebos said. It has a strong presence in New Zealand and has experienced significant growth in export markets, particularly China.
Last month Ebos said it expected annual earnings to again grow at a "double digit" rate, led by increased sales and an improved margin from its Australian healthcare businesses, after a "positive start" in the first quarter.
The company bought a stake in Australia's pharmacy retailer Good Price Pharmacy Warehouse and the BlackHawk Premium Pet Care pet food business in its latest year, while opening a pharmaceutical distribution centre in Melbourne and winning a state-wide contract to supply medical consumables to public hospitals in New South Wales.
Ebos shares last traded at $13.65 and have gained 39% this year.
(BusinessDesk)
Jonathan Underhill
Mon, 16 Nov 2015
Mon, 16 Nov 2015
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Ebos to buy Red Seal for $80m
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