Silverwood has acquired a 19.8 per cent stake in shower gel seller Lush as the investment firm says it is well placed for “generating new ideas to invigorate and strengthen” the retailer.
Silverwood said the total consideration for the purchase of Lush sale shares sat at around £216.8m.
This would be satisfied via an issue and allotment of 228,212,632 new ordinary shares to Lush co-founder Andrew Gerrie and his wife Alison Hawksley for a 95p per share price.
Silverwood has also purchased 90 per cent of the total issued share capital for Japanese skin-care maker Sonotas Holdings, alongside all of the total issued share capital of Sonotas Corporation.
The Sonotas acquisition means £417,000 in cash and around £15.6m in Silverwood shares will be paid to the Sonotas vendors.
Both Lush and Sonotas were “tremendously exciting companies with a vast amount of growth potential,” Paul Hodgins, non-executive director of Silverwood, said on Monday.
Lush’s aggregated turnover was £408m for the year ended 30 June 2021, a dip of 6.6 per cent on the prior year due to the side effects of the Covid-19 pandemic and lockdown restrictions.
After a review of the firm amid the pandemic, Lush saw its core earnings increase £32.4m to £41.1m while profit before tax hit £29.2m, up £74.4m on 2020.
Earlier this year, the soap seller bought out its US partner in a bid to almost double its sales in the UK.
The investment represented a “welcome boost” for Lush, as it looks to re-build after the pandemic, Emma Carr, retail partner at law firm Gowling WLG, told CityA.M.
“With a challenging economic climate, Lush can build its resilience and focus on growth in the year ahead, having already established a strong brand identity,” she added.