Highlights
ScarAway is the leading silicone-based scar treatment, and the second largest scar treatment brand, in the US with net 12-month sales of c.
The US is the second largest global market for scar treatments with an estimated current retail value of c.
The acquisition accelerates Alliance's strategy in the US, providing another strong consumer brand with an established distribution platform from which to drive further growth
The combination of the acquired Kelo-cote rights in the US, together with Alliance's existing rights, creates the Group's first fully global brand
Alliance can now pursue a dual-brand strategy in the US scar treatment market whilst further leveraging its existing US infrastructure following the recent acquisitions of Amberen and Vamousse
The acquisition is immediately earnings enhancing, with further strategic benefits anticipated in future years
'I'm delighted to have completed such a strategically important and earnings enhancing acquisition for Alliance which creates our first fully global brand in Kelo-cote and significantly enhances our presence in the largest consumer healthcare market in the world.'
Strategic rationale
This acquisition is fully aligned with the Group's stated strategy to complement organic growth from its existing international healthcare business with carefully selected acquisitions in the consumer healthcare space in fast growth territories where it already has a presence. The acquisition is also in line with the Group's stated intention to leverage its US infrastructure and operations, which are based in
With an estimated retail category value of c.
ScarAway is a silicone scar treatment which is currently available in sheet, gel and spray formulations; the brand had net sales of c.
Silicone sheeting or gel is universally considered as the first-line prophylactic and treatment option for hypertrophic scars and minor keloid scars, the efficacy of which has been demonstrated in many clinical studies. Kelo-cote is a global brand which is well respected and recommended by healthcare professionals worldwide and available in both a gel and spray formulation. Under its previous ownership, Kelo-cote had only a small US presence through e-Commerce, with limited promotion, and net sales of c.
The two products, ScarAway and Kelo-cote, generated combined EBITDA of c.
Alliance has significant expertise in driving growth in the scar management category, with Kelo-cote delivering 47% CER growth for Alliance in 2021, predominantly in
Acquisition terms and financial impact
Alliance has paid a total of
Group leverage will increase to c.2x at the date of acquisition, comfortably below the banking covenant of 3x. Leverage is expected to reduce to c.1.5x by the end of FY 2022, reflecting the Group's continued strong cash generation.
The Board expects the acquisition to be enhance earnings immediately, with further strategic benefits anticipated in future years. In the first full year of ownership the acquisition is expected to deliver a return on invested capital in excess of Alliance's weighted average cost of capital.
1) Kelo-cote is a leading silicone-based scar treatment brand
2) US market defined as OTC scar treatment category for brands which have a primary claim of scar prevention and/or treatment. This market is valued at
3) Net sales of c.
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About Alliance
Our core focus is on the marketing of Consumer Healthcare brands, complemented by a smaller Prescription Medicines business. In total, we hold marketing rights to around 80 brands, with revenues generated from a mix of direct, distributor and e-commerce sales.
Headquartered in the
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