Why the BWX (ASX:BWX) share price is on watch this morning

The BWX Ltd (ASX: BWX) share price will be on watch following following an acquisition announcement. We take a closer look.

| More on:
ASX share price on watch represented by man looking through magnifying glass

Image source: Getty Images

The BWX Ltd (ASX: BWX) share price is one to watch closely on Monday morning.

This follows the personal care product company’s announcement that it’s set make an acquisition to expand its e-commerce business offering.

What did BWX announce?

In a statement to the ASX, BWX advised that it has entered into an agreement to acquire Flora & Fauna.

Established in 2014, Flora & Fauna is a Sydney-based online retailer that is focused on selling vegan, ethical, and sustainable products. The company has grown to service over 94,000 active customers, with more than 300 brands across multiple categories.

Under the deal, BWX will pay somewhere between $27.9 million to $30.8 million for Flora & Fauna. This is provided that the latter is able to achieve a minimum multiple revenue-based performance for FY21. BWX expects the sale to represent 1.6 times to 1.8 times of actual FY21 revenue.

Flora & Fauna recorded strong sales growth last financial year, with FY20 revenue hitting $12 million. For the current FY21 period, the company is forecasting revenue to reach in the range of $16.4 million and $17.1 million.

BWX noted that the acquisition is unconditional and it has a right to terminate if the pre-agreed conditions are not satisfied. This includes if there is a significant material change or revenue drop below the pre-determined floor before the close of the sale.

BWX will fully fund the deal through its available debt facilities. Completion of the sale is estimated to be in July 2021.

What did management say?

BWX group CEO and managing director Dave Fenlon commented on the acquisition:

We are thrilled to welcome the Flora & Fauna team to the BWX family, and alongside Nourished Life, create a best-in-class ethical online retail platform.

With complementary categories and minimal consumer and SKU overlap, the two brands will benefit from a strategic approach to customer experience and promotions, as well as operational efficiencies.

Flora & Fauna founder and CEO Julie Mathers added:

This is a really exciting step for Flora & Fauna and the wider industry. BWX offers Flora & Fauna the opportunity to grow even further as a business with strong alignment about having a positive impact on the planet, people and animals.

BWX share price snapshot

Over the past 12 months, the BWX share price has posted a gain of almost 30%, with year-to-date performance above 10%.

Based on the current share price of $4.59, BWX commands a market capitalisation of around $644 million.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Consumer Staples & Discretionary Shares

mother feeding her baby milk
Consumer Staples & Discretionary Shares

Can A2 Milk shares benefit from the US baby formula shortage?

The United States has seen an unprecedented shortage of baby formula in recent months.

Read more »

A punter sitting in the snow on a deck chair places bets on his mobile phone.
Consumer Staples & Discretionary Shares

BetMakers share price climbs on multi-year agreement

BetMakers shares are off to a positive start for the week.

Read more »

man at casino throwing chips in the air
Broker Notes

Why the Aristocrat share price is surging again today

The gain comes on top of its 6.7% surge yesterday.

Read more »

Supermarket trolley with groceries going up the stairs with a rising red arrow.
Consumer Staples & Discretionary Shares

Woolworths share price lifts following $218m online marketplace deal

The supermarket giant is gaining alongside the ASX 200 on Friday.

Read more »

Sad person at a supermarket.
Consumer Staples & Discretionary Shares

Why is the Woolworths share price sliding 7% today?

Aussie investors heed Target's inflationary warning...

Read more »

Supermarket trolley with a red arrow pointing downwards, symbolising a falling share price.
Consumer Staples & Discretionary Shares

Here’s why the Coles share price is tumbling 5% today

Could recession talk be impacting the supermarket's stock?

Read more »

wine share price rising represented by two people raising wine glasses
Consumer Staples & Discretionary Shares

Treasury Wine share price beating the sell-off amid ‘made in China’ push

Let's take a closer look.

Read more »

A woman leaps into the air with loads of energy, in a lush green field.
Consumer Staples & Discretionary Shares

Own Woolworths shares? The company’s about to hit a major sustainability milestone

Woolies' South Australian operations are set to switch off from fossil fuels in July thanks to a new partnership.

Read more »