Cellmid Limited (ASX:CDY) agreed to acquire BLC Cosmetics Pty Ltd. from HGL Limited (ASX:HNG) for AUD 5.9 million on September 16, 2021. Cellmid will pay a total of AUD 3 million on settlement in the first tranche of the transaction, of which AUD 1 million will be payable in cash and AUD 2 million by the issuing of 32,786,885 Cellmid shares at 6.1 cents each, a 20% premium to the Company's share price on the date prior to this announcement. The AUD 3 million purchase price represents an EBITDA multiple of six, on BLC's projected earnings for the year ended 30 September 2021.

Cellmid may also pay a second tranche, subject to an increase in BLC's EBITDA during FY22. The second tranche will be calculated as three times the incremental EBITDA growth over FY21. The second tranche will also be payable in cash and shares; the first AUD 700K in cash and the remaining in shares issued at a price which is the lower of 9 cents or the VWAP over the previous 30 days prior to issue.

The number of shares to be issued under Tranche 2 is capped at 50 million and will be subject to shareholders' approval at the time. The transaction is expected to close in late October 2021.