08.25.15
Trilogy International has announced that it will acquire CS Company Limited (CS)—New Zealand’s largest independent importer and distributor of fragrances, cosmetics and toiletries—for $37 million plus any earn out payments.
CS is a privately owned New Zealand business, representing luxury fragrance brands including Marc Jacobs, Calvin Klein, Dolce & Gabbana and Gucci and cosmetics and beauty brands including Max Factor, Natio and OPI, as well as many others. Major suppliers include global industry heavyweights Coty, Procter & Gamble and LMVH.
The current owners are CEO Ken Millar, COO/CFO Ray Guilford and Dianne Reynolds, a senior executive in the business. These key executives have committed to remain on board.
Based in Mangere, near Auckland Airport, the company has impressive warehousing and distribution facilities, and a staff of 56, which includes national sales coverage.
Trilogy chairman, Geoff Ross, said the acquisition creates scale for Trilogy International and the additional earnings will provide a platform for future expansion.
The offer is made up of an up-front cash payment of $34 million, plus two deferred payments of $1.5m on the first and second anniversary of the acquisition. In addition, earn out payments will be paid on the third anniversary of the acquisition on achievement of certain profitability thresholds for the 31 March 2016 and 31 March 2017 financial years.
The acquisition, which will be funded entirely via bank debt, will be highly earnings accretive to Trilogy International. On an annualized basis CS is forecast to achieve revenue of $41m and EBITDA earnings of $6.4m in the full year ended 31 March 2016. Earnings and revenue from completion, in August, will be recorded in Trilogy International’s results for the 2016 financial year.
CS’ Ken Millar said, “This is a good opportunity for CS Company and will be a key part of the business’ next growth phase.”
Ross said the beauty market in New Zealand and internationally is growing strongly and CS represents global beauty companies with expansion strategies. “As a major player in the New Zealand beauty and cosmetics industry, CS complements our existing business, including very strong relationships with major retail partners and a national sales network, as well as expertise in on-line sales and the international beauty and cosmetics industry generally.”
“Because the business is already performing well, we don’t plan to make any major changes through the earn out period,” Ross continued. “CS will operate as a stand-alone entity and existing management will report to a subcommittee of the Trilogy Board led by Stephen Sinclair.”
Recently appointed CEO Angela Buglass will maintain responsibility for the Trilogy, Ecoya and Goodness brands, independent of the CS Distribution business.
The existing Trilogy Group business is also performing strongly, recently reporting net profit growth of 300% to $3.5m on forecast revenue of 23 million for the six months to September 2015.
CS is a privately owned New Zealand business, representing luxury fragrance brands including Marc Jacobs, Calvin Klein, Dolce & Gabbana and Gucci and cosmetics and beauty brands including Max Factor, Natio and OPI, as well as many others. Major suppliers include global industry heavyweights Coty, Procter & Gamble and LMVH.
The current owners are CEO Ken Millar, COO/CFO Ray Guilford and Dianne Reynolds, a senior executive in the business. These key executives have committed to remain on board.
Based in Mangere, near Auckland Airport, the company has impressive warehousing and distribution facilities, and a staff of 56, which includes national sales coverage.
Trilogy chairman, Geoff Ross, said the acquisition creates scale for Trilogy International and the additional earnings will provide a platform for future expansion.
The offer is made up of an up-front cash payment of $34 million, plus two deferred payments of $1.5m on the first and second anniversary of the acquisition. In addition, earn out payments will be paid on the third anniversary of the acquisition on achievement of certain profitability thresholds for the 31 March 2016 and 31 March 2017 financial years.
The acquisition, which will be funded entirely via bank debt, will be highly earnings accretive to Trilogy International. On an annualized basis CS is forecast to achieve revenue of $41m and EBITDA earnings of $6.4m in the full year ended 31 March 2016. Earnings and revenue from completion, in August, will be recorded in Trilogy International’s results for the 2016 financial year.
CS’ Ken Millar said, “This is a good opportunity for CS Company and will be a key part of the business’ next growth phase.”
Ross said the beauty market in New Zealand and internationally is growing strongly and CS represents global beauty companies with expansion strategies. “As a major player in the New Zealand beauty and cosmetics industry, CS complements our existing business, including very strong relationships with major retail partners and a national sales network, as well as expertise in on-line sales and the international beauty and cosmetics industry generally.”
“Because the business is already performing well, we don’t plan to make any major changes through the earn out period,” Ross continued. “CS will operate as a stand-alone entity and existing management will report to a subcommittee of the Trilogy Board led by Stephen Sinclair.”
Recently appointed CEO Angela Buglass will maintain responsibility for the Trilogy, Ecoya and Goodness brands, independent of the CS Distribution business.
The existing Trilogy Group business is also performing strongly, recently reporting net profit growth of 300% to $3.5m on forecast revenue of 23 million for the six months to September 2015.