Alliance Pharma PLC beefs up US arm with supplement to treat menopause symptoms

Alliance Pharma PLC beefs up US arm with supplement to treat menopause symptoms

Alliance Pharma PLC (LON:APH) has acquired US-based consumer healthcare company Biogix Inc for a total of US$110mln cash.

The AIM-listed company said the addition of Biogix and its fast-growing Amberen treatment for menopause symptoms would be immediately earnings enhancing in the 2021 calendar year and is expected to be “significantly earnings enhancing” from 2022.

Primarily from sales of Amberen, Biogix generated net sales of US$22mln in the 2019 calendar year, which is expected on a run-rate basis to have grown to US$27mln for 2020 with underlying earnings (EBITDA) of roughly US$7mln, boosted by the launch of a perimenopause product and further distribution gains.

The acquisition adds a strong brand in a new market segment for Alliance within the fast-growing vitamin, mineral, supplement market, as well as increasing the scale of its US business.

Amberen is expected to become Alliance’s second-largest brand, while also resulting in the US coming to represent roughly 17% of group revenues on a proforma basis, and consumer healthcare representing over 70%.

“As an established, clinically evidenced brand with significant sales and good growth potential, in a growing market, Amberen fits perfectly with our strategy of acquiring established consumer healthcare brands in territories where we already have a presence,” said Peter Butterfield, Alliance’s chief executive officer.

“This acquisition significantly enhances the scale of our business operations in the US, the largest healthcare market in the world, and provides the business with another great platform for the delivery of future organic growth, alongside our key existing brands; Kelo-cote and Nizoral.”

Launched in the US in 2007, since 2015, Amberen has gained strong retail distribution across multiple channels, such that it is currently the primary driver of category growth in the US.

Alliance said its existing Vamousse brand and Amberen will benefit from distribution channel synergy in the US.

The initial consideration for the deal of US$110mln on completion has been funded by a drawdown from the group’s existing £165mln revolving credit facility.

Following this drawdown, the total drawn facility will be approximately £141mln, with £24mln of the facility undrawn post-completion.

Group leverage will increase to around 2.5 times at completion and fall to below 2.0 times by the end of next year thanks to the expected continuation of its strong cash generation, the group said, versus its banking covenant of 3.0 times.

This content was originally published here.

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