REG - Venture Life Group - Cash sale of CDMO operations

Venture LifeAnnouncement

12/05/2025 07:00

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RNS Number : 2336I  Venture Life Group PLC  12 May 2025

12 May 2025

THIS ANNOUNCEMENT WAS DEEMED BY THE COMPANY TO CONTAIN INSIDE INFORMATION AS
STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 AS IT FORMS
PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.
WITH THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INFORMATION IS NOW CONSIDERED
TO BE IN THE PUBLIC DOMAIN.

 

VENTURE LIFE GROUP PLC

("Venture Life" or the "Company")

Sale of contract development and manufacturing operations and certain non-core
products for €62m in cash on a cash free, debt free basis

Optimisation of business and strategic focus

New long-term development and manufacturing agreement

Board change

Venture Life (AIM: VLG), a leader in product innovation, development and
commercialisation within the global consumer healthcare sector, announces that
it has entered into a binding agreement with BioDue S.p.A ("Biodue"), a
contract development and manufacturing organisation ("CDMO") based in Italy
and a portfolio company of The Riverside Group, for the sale of:

 

·      100 percent of the issued share capital of Biokosmes SRL
("Biokosmes") and of Venture Life Manufacturing AB, the holding company of
Kullgren Holdings AB and Rolf Kullgren AB ("Gnesta") (collectively the "CDMO
Business"); and

·      some of the Group's peripheral products 1  (#_ftn1) (collectively
the" Non-Core Products" and associated commercial agreements (together with
the CDMO Business, the "Target Assets")).

 

for a consideration of €62.0 million (c.£53.0 million) (the "Sale") on a
cash free, debt free basis.

 

Completion of the Sale is conditional on the satisfaction of certain
conditions, including the approval under the applicable foreign direct
investment regimes in Italy and Sweden.

 

The consideration will be payable in cash and in full to the Company on
completion (the "Proceeds"). The Proceeds will provide Venture Life and its
subsidiaries (the "Group") with significant financial resources to invest
further behind its existing brands, and to seek and select further
complementary acquisitions of products and assets across the UK, US and Europe
enabling the Group to capitalise on the opportunities available and continue
scaling the business to deliver growth for shareholders.  The Proceeds will
also be utilised to pay down the Group's drawn balance ("Debt") on its
Revolving Credit Facility ("RCF"), although the facility will remain in
place.

 

Strategic rationale

 

The Sale presents the opportunity for the Board to streamline the Company's
operations through the disposal of the Non-Core Products whilst simultaneously
being able to move the business away from capital intensive manufacturing
operations.  This will enable the Group to direct increased cashflow into the
commercialisation, growth and development of the Group's higher margin core
brands namely Balance Activ, Health & Her/Him, Lift, Earol, Pomi T and
Gelclair (collectively the "Power Brands").

The Group will retain all its key strategic customer relationships pertaining
to the Power Brands, including the partnership with Bayer Consumer Care AG,
and will continue to expand its franchise in women's health which remains a
strong area of focus going forward.

 

The Board believes that the Sale represents an opportunity for the Company to
realise cash at an attractive multiple on lower margin capital intensive
assets which it can redeploy, post repayment of the Debt, in the growth of its
existing Power Brands as well as in the acquisition of carefully selected,
margin accretive, fast growth assets, at lower multiples, in key geographic
markets (UK/US/EU), where the Board believes there is a significant
opportunity to create strong commercial synergies across the Group's core
categories of interest.

 

As a consequence, and following the Sale, the Group will become a pure play
consumer healthcare brand platform focusing on "Proactive Healthy Longevity"
for the consumer, providing both preventative and treatment solutions to
support a longer healthier life. This will involve investment in data driven
insight and integrated digital capabilities to help drive growth from our
existing brands, simultaneously leveraging an omnichannel go to market
strategy in key markets to be where the shopper shops and seeking selective
acquisitions in complementary high growth categories which have a clear road
to profitable growth.

 

Transitional arrangements and long-term development and manufacturing
agreements

 

On completion, the Group will enter into a long-term development and
manufacturing agreement for an initial term of 10 years whereby Biokosmes and
Gnesta will continue to provide development and manufacturing services to the
Company as part of BioDue's larger CDMO business.   After the Sale, the
Group will retain offices in the United Kingdom, Spain and its newly
established infrastructure in the US.

 

The CDMO Business will take on ownership, management and maintenance of some
of the requisite technical files relevant to the manufacturing of some of the
Power Brands, with Venture Life retaining perpetual, exclusive and royalty
free global rights over these.  Following the Sale, the Group will be the
largest customer to the CDMO Business and this continued strategic partnership
will enable Venture Life to continue building on its product innovation and
development pipeline.  BioDue holds strong expertise in food supplements
which is an area of interest to the Group and thus expected to be of
significant benefit to the Group going forward.

 

As part of the Sale, the CDMO Business and the Company will enter into a
two-way transitional services agreement until 31 December 2026 to ensure a
smooth transition.

 

Further details of the Sale

 

Along with other customary conditions, completion of the Sale is conditional
on the approval being received under the foreign direct investment regimes in
Italy and Sweden.  It is expected that completion will take place in Q3 2025.

 

Revolving Credit Facility ("RCF")

 

Certain of the Proceeds will be utilised to pay down the drawn balance on the
Group's RCF (the "Debt") which, at 30 April 2025, was £20.6m. The facility,
which will be retained and remain available to support further M&A
activities, allows Group net leverage(4) up to 2.5x Adjusted EBITDA(2)
including the twelve-month trailing EBITDA of acquisitions.

 

Board Change

 

Gianluca Braguti, who joined the Venture Life's board in 2014 when Biokosmes
became part of the Group, will remain a Director of Biokosmes and accordingly
will step down as a member of the Company's board on completion of the Sale.

 

Financial effects of the divestment

 

For the financial year ended 31 December 2024 the unaudited preliminary
results of the Target Assets collectively generated revenues of £20.5
million, adjusted EBITDA of £4.9 million and a profit before tax of £0.3
million.  As at 31 December 2024 the Target Assets had a net carrying value
of £28.9 million. It is expected that the Company will report a one-off
profit on the disposal of in the region of £24.1 million in its FY25
accounts.

 

FY 24 Results

 

The Company confirms that, following today's announcement of the Sale, the
Company now expects to release its audited results for the year ended 31
December 2024 on Thursday 19 ( )June 2025.

 

Investor Meets Presentation

 

Jerry Randall (CEO) and Daniel Wells (CFO) will provide a presentation via
Investor Meet Company at 10:00am BST today. The presentation is open to all
existing and potential shareholders. Investors can sign up to Investor Meet
Company for free and add to meet Venture Life Group plc via:
https://www.investormeetcompany.com/venture-life-group-plc/register-investor
(https://www.investormeetcompany.com/venture-life-group-plc/register-investor)
 Investors who already follow Venture Life Group plc on the Investor Meet
Company platform will automatically be invited.

 

 

Jerry Randall, Chief Executive Officer, commented: "I am delighted to
announce the Sale today and to have achieved a 11x the Target Asset's EBITDA
for FY 24.  This is an exciting transaction and achieves many objectives for
Venture Life.   In particular, it enables us to simplify the structure of
the business, invest in our Power Brands and become a pure play consumer
healthcare platform with a strategic focus on products and brands that support
proactive, healthy longevity in their customer base.

 

Since joining Venture Life in 2014 the whole team at Biokosmes has been
instrumental in our growth to date. As a Board we wish to extend our thanks,
in particular, to Gianluca for his enormous contribution to Venture Life over
the last 11 years. Gianluca has been a key influence in the way the Company
has developed and we are pleased that we will continue to benefit from his
knowledge and expertise as Biokosmes transitions to become our key supplier.
BioDue has significant CDMO operations, in particular in complementary areas
to those of Bioksmes & Gnesta, such as food supplements, and we fully
expect this expertise and capacity to benefit Venture Life in the future. I
also want to express the thanks of myself, the Board and the whole Group to
all our colleagues at Biokosmes & Gnesta, for all of their hard work,
commitment and support in our long journey together, but look forward to the
exciting future we have together as customer and supplier.

 

The significant cash and debt resources that the Group will have at its
disposal going forward will enable us to invest behind our current exciting
Power Brands to drive growth ahead of peers and capitalise on some of the
exciting earnings accretive M&A opportunities that exist in the consumer
healthcare space. We have seen good growth to date in 2025 in our Power Brands
and the increased financial resources now available to us will allow us to
further increase investment into them and continue to drive growth across them
and any future acquired brands."

 

Notes:

(2)  Adjusted EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortisation) is profit before tax adjusted for interest, depreciation,
amortisation, share based payments and exceptional items.

(3) Group net leverage on a bank test basis is net bank borrowings divided by
Adjusted EBITDA(2), annualised for the effect of acquisitions.

 

 

For further information, please contact:

 

 Venture Life Group PLC                                    +44 (0) 1344 578004
 Jerry Randall, Chief Executive Officer

 Daniel Wells, Chief Financial Officer

 Cavendish Capital Markets Limited (Nomad and Broker)      +44 (0) 20 7720 0500
 Stephen Keys / Camilla Hume (Corporate Finance)

 Michael Johnson (Sales)

About Venture Life (www.venture-life.com (http://www.venture-life.com/) )

Venture Life is an international consumer self-care company focused on
commercialising products for the global self-care market. Headquartered in
the UK, the Group's product portfolio includes Balance Activ in the area of
women's intimate healthcare, Earol® supporting ENT care, Lift and Glucogel
product ranges for energy and glucose management and hypoglycaemia, the Health
and Her product range supporting the hormonal lifecycle, the UltraDEX and
Dentyl oral care product ranges. The products, which are typically recommended
by pharmacists or healthcare practitioners, are available primarily through
pharmacies and grocery multiples and are sold in over 90 countries worldwide.
In the UK and The Netherlands these are supplied direct by the company to
retailers, elsewhere they are supplied by the Group's international
distribution partners.

 1  (#_ftnref1) Xonrid, Procto-eze, Rosacalma, Vonalei, NeuroAge, Lissio, and
the private label footcare products for wart and fungal nail treatments.

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