Leading online beauty retailer Adore Beauty Group (ASX: ABY) has entered into a binding agreement to acquire 100% of Australian beauty and wellness brand, iKOU Holdings Pty Ltd for $25 million in an all-cash deal.
The transaction is being funded by Adore Beauty’s strong balance sheet of $32.3 million, with $20 million being paid at completion and the balance due 18 months later.
iKOU is a premium Australian brand with established retail and wholesale operations. Founded in the Blue Mountains, iKOU’s extensive product range comprises more than 300 SKUs across organic skincare, bath and body, home fragrance, herbal tea and spa lifestyle accessories. The brand caters to the clean beauty trend with organic, Australian made, and cruelty-free products spanning beauty and wellness categories.
iKOU’s range is available through its three retail boutiques in the Blue Mountains, Sydney, and Byron Bay, a direct-to-consumer website, and via wholesale distribution agreements with retail stockists and luxury spas.
Established 17 years ago by founders Naomi and Paul Whitfeld, iKOU is an ideal strategic fit for Adore Beauty and supports the company’s long-term growth and margin targets. The business is profitable and debt-free and is forecast to generate revenue of $8.1 million and EBITDA of $2.0 million3 in FY24. The acquisition will be earnings per share (EPS) accretive from year one.
“iKOU complements and strengthens our existing business, delivering revenue growth and margin expansion, as well as supporting private label and physical store initiatives. The brand’s extensive product range accelerates private label share of revenue, improves our margin profile, and provides our first store footprint across three premium locations,” Adore Beauty CEO Tamalin Morton said.
“Renowned for its high-quality products, iKOU has a loyal, repeat customer base. The business has strong foundations, and we see additional opportunities to grow the brand, replicating its NSW success in other Australian states through the Adore Beauty platform.”
Subject to satisfaction of certain conditions precedent, Adore Beauty expects to complete its acquisition of iKOU on 31 July 2024.
