Wellnex Life is continuing its expansion trajectory acquiring Mr. Bright teeth whitening brand as it provides a positive trading update for the first two months of FY23.

Aussie health and wellness company Wellnex Life Limited (ASX:WNX) has entered into a binding asset sale agreement to acquire 100% of the premium teeth-whitening brand Mr. Bright.

The company will acquire Mr. Bright for $1.5 million in ordinary shares in WNX at a minimum price of 10 cents/share or the 5-day VWAP price immediately prior to settlement, whichever is higher.

The deal will see 50% of shares escrowed for 12 months from issue and 50% shares escrowed for 24 months from issue.

WNX anticipates settlement to occur immediately after the company’s AGM in November, subject to shareholder approval.

Brightening smiles

Founded in 2016, Mr. Bright is a teeth-whitening brand that offers a range of premium and effective take home teeth-whitening solutions.

Mr. Bright uses the latest in high-tech safe dental technology and doesn’t contain the commonly used harmful chemical hydrogen peroxide.

Instead, Mr. Bright’s products use glycerine, sodium bicarbonate and cranberry to deliver whitening agents deep into the tooth enamel.

Mr. Bright has distribution channels in the USA and UK, as well as online sales channels, however the products have poor penetration in the Australian market.

WNX is hopeful that its relationships will expand the distribution channels domestically, significantly increasing revenue and profitability.

Mr. Bright has seen strong year on year growth and has a strong EBITDA margin of circa 20%, which is anticipated to increase as distribution channels expand and efficiencies are achieved post-acquisition.

Annualised revenue for Mr. Bright was ~$4 million and normalised EBITDA for FY22 was ~$800k with continued growth in FY23 so far and ranging recently secured in Chemist Warehouse New Zealand.

Positive trading update

Meanwhile, WNX has provided a trading update for the first two months of FY23 which have delivered strong results.  Among key results include:

  • Revenue for July and August 2022 at $3.93 million, up 46% compared with pcp of $2.68 million in July and August 2021
  • On track to meet guidance of $29 million in revenue for FY23
  • Continued contract manufacturing work across customers during the period.
  • Wellnex Life wholly owned brands continue to see month on month growth across both pharmacy and grocery channels.
  • Organic A2 infant formula range, ready for launch in October in Chemist Warehouse Ocean Road Dairies brand.
  • Mark Wahlberg Performance inspired supplement range to be delivered in September in preparation for launch in Chemist Warehouse nationally in October, with the initial purchase order received.

Aussie first organic A2 infant formula

Wellnex Life in a joint venture with Australian Dairy Nutritionals (ASX:AHF) will bring to market Australia’s first organic A2 infant formula product.

The new, highly targeted infant formula range is manufactured at AHF’s state-of-the-art facilities in Victoria.

WNX will oversee sales and marketing through its established and market-leading distribution network.

Mark Wahlberg’s Performance Inspired licensing deal

WNX announced last year it had signed a licensing agreement with US nutritional supplements brand Performance Inspired.

The deal will give WNX exclusive distribution rights in Australia and New Zealand for Performance Inspired products, as well as first rights to expand distribution to Asia.

Performance Inspired was launched by high-profile actor and entertainer Mark Wahlberg and industry expert Tom Dowd, who was previously general manager of global supplements company GNC and brings more than 25 years of experience.

Both Wahlberg and Dowd have put their names on the label of the Performance Inspired product range that spans almost 60 nutritional products and supplements.

Forecast for FY23 has CEO smiling

WNX CEO George Karafotias said he was pleased with performance for the first two months of FY23, with all segments experiencing growth.

“The company anticipates the strong start to continue and accelerate throughout the year with a number of exciting product and brand launches,” he said.

“The guidance of $29 million in revenue for the full year is in on track, with the potential for further upside dependant on the success of the new launches over the coming months.”

Join a briefing

Join Wellnex Life CEO George Karafotias for an investor briefing on Thursday 15th September at 11am (AEST) where he will provide a company update. Click here to register.

This article was developed in collaboration with Wellnex Life, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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