Revolution Beauty acquires manufacturer Medichem
Mass-market beauty retailer Revolution Beauty has acquired its closely-linked, long-term haircare and skincare products supplier Medichem Manufacturing for £23 million.
The Medichem business was owned by Tom Allsworth, executive chairman of Revolution Beauty, who was its sole shareholder.
UK-based Medichem’s end-to-end operations include an R&D laboratory, bulk manufacturing, warehousing and distribution, employing more than 170 people. It becomes Revolution Beauty's first acquisition, “providing the group with its own, fully-owned and vertically integrated manufacturing business”.
During its last financial year to 31 December 2020, Medichem reported audited revenues of £13.4 million and pre-tax profit of £1.6 million.
“Given the strong year to date growth in Revolution Beauty's haircare and skincare categories, Medichem has continued to perform well in 2021,” the buyer noted.
Revolution Beauty added: “The purchase will enable the group to enhance margins, increase control of its supply chain and enhance productivity. The company expects the acquisition will be significantly earnings enhancing for the financial year ending 28 February 2023.”
The purchase price will be payable in instalments, with £7 million payable in cash on completion from the group's current cash resources, and the balance payable in equal annual £4 million instalments over four years.
Adam Minto, CEO and joint founder of Revolution Beauty Group, called the firm a “highly-complementary manufacturing business”.
“By vertically integrating Revolution Beauty in this way and taking manufacturing in-house for the first time, we will have even more control of our supply chain, allowing us to improve productivity, our cost base and margins, while being earnings accretive,” he added.
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