BWX (ASX:BWX) share price drops after completing acquisition

Flora & Fauna gets finalised…
The post BWX (ASX:BWX) share price drops after completing acquisition appeared first on The Motley Fool Australia. –

The BWX Ltd (ASX: BWX) share price is in the red at open this morning.

Before market open, the natural beauty and wellness company’s shares were fetching $5.23 a piece. After opening lower at $5.18, the BWX share price is down 2.29% at the time of writing to $5.11.

What did BWX announce?

The company this morning announced the completion of its Flora & Fauna acquisition.

Flora & Fauna was established in 2014 and has since become one of Sydney’s leading online retailers for vegan products. It has more than 94,000 active customers across 300 brands that span multiple categories such as clothing and accessories, skincare, and food.

BWX originally announced the acquisition on 17 May as a plan to expand the company’s e-commerce offering.

According to today’s release, BWX has completed the acquisition for an estimated total consideration of $27.9 million. This reflects an acquisition multiple of 1.7 times actual net revenue for FY21.

BWX Group chief executive officer Dave Fenlon said:

BWX is at the forefront of the global wellness revolution, and now our business is even more leveraged to industry and digital tailwinds through this acquisition. Importantly it supports our ambition to stay connected with our consumers and their values. Demand for nondiscretionary skincare remains strong but has been buoyed by preferences for ethical, vegan and sustainable products.

Flora & Fauna founder, Julie Mathers, has been appointed managing director of the new business unit which consists of Nourished Life and Flora & Fauna. The appointment is effective as of today.

Trading update

In addition to the acquisition, BWX provided a trading update for the newly integrated business.

The release noted Flora & Fauna is on track to deliver total net revenue of $16.4 million in FY21 – an increase of 35% on FY20.

Additionally, BWX noted it has paid an instalment of the total consideration. It is anticipated the remaining balance will be paid in the first quarter of FY22, subject to finalisation of the closing accounts.

BWX share price compared to ASX 200

The BWX share price outpaced the S&P/ASX 200 Index (ASX: XJO) in the last financial year. While the Aussie benchmark index pulled a respectable 20% return, the beauty company surged 39%.

Despite the strong performance, BWX is still below its all-time high of $7.74 a share.

The post BWX (ASX:BWX) share price drops after completing acquisition appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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