This morning, Venture Life Group (VLG) , a niche consumer healthcare products firm, announced that it was disposing of its contract development and manufacturing operations (CDMO) along with certain non-core products for €62m (£53.0m or 41p/share) to BioDue SpA.
In 2024, these assets delivered revenues (mostly related to 3rd party brands), adjusted EBITDA and PBT of £20.5m, £4.9m and £0.3m respectively, thus putting the transaction on attractive exit multiples of 2.6x EV/revs, 10.8x EV/EBITDA and 1.8x Price/Book, whilst equally generating an approx. £24.1m one-off gain in FY25.
Better still, the disposal will allow Venture Life Group to focus exclusively on its higher gross margin 'Power Brands' (est FY24 sales £31.3m), such as Balance Activ, Health & Her/Him, Lift, Earol, Pomi T and Gelclair - together focusing on "Proactive Healthy Longevity" for the consumer, providing both preventative and treatment solutions to support a longer, healthier life.
Furthermore, VLG will not only retain all its key strategic customer relationships pertaining to these Power Brands (including the partnership with Bayer) and will continue to expand its franchise in women's health, but also the cash proceeds will provide the firepower to pay down its £20.6m RCF and execute future earnings enhancing M&A.
Elsewhere, on completion the Board will enter into a long-term development and manufacturing agreement for an initial 10 years with BioDue, alongside a two-way transitional services agreement until 31 December 2026 to ensure a smooth handover. Interestingly too, BioDue possess real expertise in food supplements, which is a potential strategic area of interest to VLG. All round, a win-win deal.
CEO Jerry Randall commenting: "I am delighted to announce the Sale today and to have achieved a 11x the Target Asset's EBITDA for FY24. This transaction enables us to simplify 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."
Adding "The significant [financial] resources that the Group will have going forward will enable us to invest behind our 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 [this deal] will allow us to further invest in them and drive growth."
Lastly, house broker Cavendish reckons the remaining VLG will deliver FY25 turnover, adjusted EBITDA and EPS of £43m, £7.7m and 4.2p respectively, closing Dec'25 with net cash of £32.8m - meaning at 45p, the stock trades on a very modest 3.4x EV/EBITDA.
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