Samarkand Group PLC (LON:SMK) said it has acquired Zita West Products Ltd (ZWPL), a UK nutritional supplement brand for the fertility and pregnancy market, as well as a 51% stake in mother and baby nutritional product and probiotics maker Babawest Ltd for a total consideration of around GBP2.4mln.
The consumer brands firm said it will fund the purchase with GBP1.9mln in cash as well as the issuance of 357,977 new shares at a price of 139.67p, an 11.3% discount to its closing price on Friday. The group said it has also agreed to provide a shareholder loan of up to GBP400,000 to Babawest.
Samarkand said it intends to use its market knowledge and NOMAD technology platform to grow ZWPL in the cross-border ecommerce market in China as well as in the brand’s home market in the UK.
The company added that the two brands were “attractive targets” for acquisition as the combination in multiple markets provided “economies of scale for consumer acquisition and lifetime value”. It added that both brands will use existing supply chains to increase Samarkand’s overall efficiency and that it plans to develop ZWPL and Babawest in the cross-border ecommerce market in China before the end of 2021.
For the six months ended March 31, 2021, ZWPL generated revenues of GBP635,901, a 60% increase year-on-year.
“Zita West is a brand of outstanding pedigree and [founder Zita West’s] reputation as a leading fertility consultant internationally precedes her. We have always believed that Zita West Products has a bright future in the UK and China and I’m delighted that Zita has chosen Samarkand to make the investment. Acquiring Zita West Products with an opportunity to work with [co-founder] Leo Bamford on Babawest was the perfect combination. We are also delighted to have them as Samarkand shareholders,” Samarkand chief executive David Hampstead said in a statement.