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Trilogy scoops up smaller rival

NZ Newswire logoNZ Newswire 28/06/2017 Paul McBeth

Trilogy International, the scented candle and beauty products maker grappling with rising raw material costs, will spend $13.8 million buying control of smaller rival Lanocorp's New Zealand and Australian businesses.

Auckland-based Trilogy will pay $12.5m upfront in cash for 80 per cent of Lanocorp New Zealand, whose suite of beauty products include Lanocreme, By Nature and Tiaki, with two further payments tied to earnings targets.

It also has a call option to buy the remaining 20 per cent after three, four or five years.

Trilogy said it has also conditionally agreed to buy Lanocorp's affiliated Australian business for a further $1.3m.

Christchurch-based Lanocorp gives Trilogy geographic diversity with greater exposure to the US market and ability to pursue products and channels outside the reach of its current portfolio, says chairman Grant Baker.

Trilogy lifted annual earnings 19 per cent to $19.4m in the year through March 31.

It expects Lanocorp to boost earnings, showing up in the first-half and annual results for the year ending March 31, 2018.

Lanocorp generated earnings before interest, tax, depreciation and amortisation of $2.4m in the 12 months ended March 31, 2017, on revenue of $10.3m.

Trilogy will fund the acquisition with existing banking facilities.

Lanocorp managing director Tim McIver will stay on with the business and report to a Trilogy sub-board made up of directors Stephen Sinclair and Grant Baker and chief executive Angela Buglass. Companies Office documents show Mr McIver is the controlling shareholder with 99 per cent, held in a parcel with accountant Noel Watson. The rest of the shares are owned by Jerome and Suzanne Blakely.

Trilogy shares last traded at $2.05 and have dropped 32 per cent so far this year.

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