Australian Pharmaceutical Industries Announces to Acquire Clearskincare Clinics

API has entered into binding agreements to acquire the assets of Clearskincare Clinics for a total cash consideration of $127.4 million, creating a leading Australian health and beauty products and services business. The Acquisition will be initially funded through debt facilities that have been established specifically for this purpose. Under the terms of the agreements, an additional capped cash consideration payment of up to $20 million may be payable subject to certain performance hurdles being met in 2020 and 2021.

The Acquisition is highly compelling and complementary. It delivers API shareholders the next stage of API’s development strategy through having a more diversified business with accelerated growth potential due to accessing an early stage, rapidly growing market with professional healthcare services.

API Managing Director and CEO, Richard Vincent, said: “The Acquisition fulfils our criteria for aligning with a robust business in a burgeoning sector of the health and beauty market, that is services-based and away from government funding, andto which we can add further value for customers, clinic teams and shareholders.

Clearskincare Clinics founder and Clinical Director, Dr Philippa McCaffery said: “Both my business partner Alarna Longes and I are delighted to be joining API because the fit between the businesses works so well. Together we can take the Clearskincare Clinics experience to more customers across Australia and the skills of both businesses will really deliver on our growth potential.”

“We expect to build scale and profitability because of our operational capabilities in franchising, network development and consumer products management. Also, API’s Priceline Pharmacy business and Clearskincare Clinics share the same core customers, which will enable us to leverage our marketing assets acrossboth businesses

“In the medium term, we see significant opportunities to increase the Clearskincare Clinics’ network size and increase the market penetration of Clearskincare Clinics’ services and products, in particular by using our existing customer relationship management capabilities.

“The strong market position Clearskincare Clinics currently enjoys is testament to the excellent work of management to date and I am delighted the two founders have agreed to continue their work under API’s ownership,” Mr Vincent said.

Clearskincare Clinics founder and Clinical Director, Dr Philippa McCaffery said: “Both my business partner Alarna Longes and I are delighted to be joining API because the fit between the businesses works so well. Together we can take the Clearskincare Clinics experience to more customers across Australia and the skills of both businesses will really deliver on our growth potential.”

API and Clearskincare Clinics share a clinical-retail focus (across similar retail network locations) and are both experienced in operating with health professionals in regulated delivery environments.

“Having conducted a thoroughdue diligence process of the market and Clearskincare Clinics we are confident we have the right business with an established market position. The structure of the Acquisition ensures we transfer the requisite knowledge and skills onto API’s management while also utilising our balance sheet strength for the benefit of shareholders.

“The Acquisition is an excellent opportunity for API and it will operate as a separate business unit reporting to me so the day-to-day operational focus of the management teams in existing businesses will continue unchanged,” Mr Vincent said.


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