The natural skincare company’s shares are battliing redness today.
The post BWX (ASX:BWX) shares slide on strategic acquisition appeared first on The Motley Fool Australia. –
The BWX Ltd (ASX: BWX) share price is in the red this morning.
Shares in the natural skincare company are trading lower following an announcement earlier today.
Let’s take a look at what BWX announced and why investors are jumping out.
BWX finalises strategic partnership with Chemist Warehouse
Earlier today, BWX confirmed its strategic partnership with Chemist Warehouse Group.
The company announced that a second tranche of BWX shares was issued to Chemist Warehouse Group. A total of 881,613 shares were issued in connection with a 5-year equity-linked strategic partnership.
More on the strategic partnership with Chemist Warehouse
The strategic partnership with Chemist Warehouse is not news to BWX shareholders.
Earlier this year, BWX announced a strategic partnership with Chemist Warehouse Group. Under the agreement, BWX will become a platinum supplier to Chemist Warehouse.
The 5-year commercial partnership will see the entire range of BWX products (Sukin, Andalou, Mineral Fusion and private-label brand Life Basics) available through the Chemist Warehouse online store.
In addition, BWX’s brands will have an increased presence in Chemist Warehouse stores with expanded shelf space for its natural products.
The company’s management highlighted the partnership is expected to result in positive earnings-per-share (EPS) growth.
In return, Chemist Warehouse will gain an initial equity stake of 0.6% in BWX. The holding is subject to increase to 2.4% of the BWX share capital, based on an agreement of performance targets.
BWX issued the first tranche of shares in March, equating to 881,613 shares.
Snapshot of the BWX share price
The BWX share price has performed relatively strongly in 2021, currently trading more than 19% higher year to date.
The BWX share price hit a 52-week-high of $5.63 in mid-June and has consolidated lower since then.
Following today’s announcement, the BWX share price tumbled more than 3% lower, hitting an intra-day low of $4.78. At the time of writing, shares in BWX have recovered and are slightly lower for the day, trading at around $4.88.
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Motley Fool contributor Nikhil Gangaram 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.