Swisse Wellness to partner with Biostime
Swisse Wellness (“Swisse” or “the Company”) and Biostime announced today they have reached a binding heads of agreement whereby Biostime will secure an 83% interest in Swisse implying an enterprise value of A$1.67 billion.
Biostime is one of the leading premium infant formula, baby food and baby care producers in Asia with revenues of RMB A$4,732m (A$934m) in FY14. Its portfolio of trusted and widely recognised brands includes BIOSTIME, Adimil, BMcare and Mama100. Headquartered in Guangzhou, China, Biostime employs over 3,300 people and is listed on the Hong Kong Stock Exchange. Biostime will bring significant China-wide distribution, e-commerce capability and a well-established customer loyalty program to the partnership.
Stephen Ring, Swisse’s founding shareholder said: “I am incredibly proud to have been part of Swisse’s journey so far. The strength of the business is testament to the hard work, passion and energy of the entire Swisse team and I thank them for their ongoing commitment to the business.
“I would particularly like to thank the Executive Team; our CEO, Radek Sali for his vision and marketing implementation of our values; Executive Chairman, Trevor
O’Hoy for his financial experience and guidance in maximising our potential; and my long-term business partner, former CEO and architect of the Swisse culture, Michael Saba.
“In Biostime we recognised a business with many of the same values that have been, and remain, fundamental to Swisse. As partners I am confident that we can achieve great things as we seek to become the leading global wellness brand.”
Mr Luo Fei, CEO and Chairman of Biostime said: “The Swisse brand is synonymous with Australia’s clean, green and healthy lifestyle and the quality and premium positioning of the brand. Swisse has strong appeal to Chinese consumers and is considered a leading VHMS brand.
“Swisse is a compelling strategic fit for Biostime. Innovation and quality are at the core of both our companies and our customer bases are highly complementary. The acquisition of Swisse is closely aligned with our strategy of expanding our portfolio and entering new markets as we seek to become an all-round nutrition and care expert for the entire family. We look forward harnessing our world-class capabilities in distribution, innovation, research and development and customer loyalty, as we work with the team to build on the Swisse legacy.
“We acknowledge that the management and employees of the company have been a key element of its success and we are delighted to continue this exciting journey together.”
Trevor O’Hoy, Executive Chairman of Swisse, said: “The last two years have been transformational for the business. We have improved profitability, strengthened the balance sheet, broadened our distribution platform, and importantly, established the foundations for strong and sustainable growth. This is a credit to the passion and energy of our team and the support of our shareholders.”
Radek Sali, Chief Executive Officer of Swisse Wellness, will continue to lead Swisse Wellness, and alongside the Executive team and existing shareholders, will remain invested in the business. Mr Sali will also join the Biostime Board.
“Swisse has a long and proud history of delivering quality natural, scientificallyvalidated products to help people lead happier and healthier lives. We have grown from a small family-owned business in the suburbs of Melbourne to become Australia’s number one wellness brand on the back of an unwavering commitment to the highest standards of quality, safety and product efficacy,” Mr Sali said. “Our record FY15 result demonstrates the business has good momentum and a strong and sustainable platform for growth through FY16 and beyond.
“As a Board and Executive team we have worked through a comprehensive process to determine the best partner for Swisse moving forward. We were particularly drawn to Biostime’s experience in building trusted brands, and stand to benefit from its sophisticated e-commerce platform supported by a large customer loyalty program.
“Under Biostime’s ownership Swisse will have access to new capital and capability, so that we can take advantage of multiple growth opportunities, both in Australia and internationally.
“Right across the world there is a growing demand for high-quality wellness products. The VHMS sector in Australia and New Zealand is growing at around 7% annually and we see enormous opportunity in markets such as China where the demand fundamentals are very strong and where we have been the number one selling VHMS brand across multiple online platforms for eleven months now.
“Australia continues to be a core market for Swisse Wellness and going forward we will remain headquartered here in Melbourne.
“We were thrilled to have been named as one of Australia’s 25 Best Places to Work this year and our commitment to the unique Swisse culture, and to being an inspiring and innovative workplace, remains steadfast,” Mr Sali said.
Goldman Sachs is the financial advisor to Swisse Wellness, with Herbert Smith Freehills advising on the legal requirements of the deal.