Blackmores (ASX: BKL) has today confirmed the divestment of subsidiary Global Therapeutics for $27 million to health company McPherson's Limited (ASX: MCP).
The sale of the business, known for its Fusion Health and Oriental Botanicals brands, comes just over four years after Blackmores acquired the company.
The divestment of Global Therapeutics, which focuses on traditional Chinese medicine in combination with contemporary herbal treatments, follows a review of the Blackmores portfolio by CEO Alastair Symington.
In February, Symington announced to shareholders the company would be divesting non-core brands from the portfolio.
"Fusion Health and Oriental Botanicals are wonderful brands which play an important role in the health and wellness routine of many Australians," said Symington.
"While we have decided that Global Therapeutics is no longer part of our strategic priorities, I want to acknowledge the unique value of these brands and believe Global Therapeutics will now have an opportunity to reach its true potential with McPherson's."
To fund the acquisition McPherson's is embarking on a $36.5 million capital raise via the issuance of 16.1 million shares at an 8.1 per cent discount to the last closing price on Monday, 26 October.
In addition, a further $10 million will be raised via a non-underwritten share purchase plan.
"Building on McPherson's 160-year rich history and our strategic focus on health, wellbeing and beauty categories, has recently seen us establish a new health and wellness division within McPherson's," said McPherson's CEO and managing director Laurence McAllister.
"Acquiring Global Therapeutics embeds a strong vitamins and dietary supplements business in that division with recognised brands, a go to market capability and a strong product innovation pipeline.
"We have been very impressed with the passion and capability of the Global Therapeutics team and we look forward to growing the business in partnership with this highly engaged group."
The transaction is due for completion on 30 November.
Business News Australia