ECOYA - Considering M&A options

Excerpt from AFR, late yesterday evening. I would be interested to see how they choose to price this (especially relative to Dusk), as well as what buyers may crop up (and whether we're one of them). I'd thought ECOYA was larger and had a slightly greater presence than the numbers indicate - they could potentially integrate well into our business model. Obviously still in early stages, but this is seemingly one of our more 'comparable' companies so hopefully this progresses far enough to provide us with some more information!

"Candles and bodycare business ECOYA needs a new flame, and its asked Deloitte Corporate Finance to make the introductions. Candle business ECOYA is up for sale. Deloitte’s dealmakers mailed out a six-page teaser to potential suitors in recent days, asking them to sign a confidentiality agreement to get an information memorandum and take part in what’s expected to be a two-part auction.

Deloitte pitched the ECOYA as a seller of “affordable luxury” home fragrance products in four segments: candles, diffusers, bodycare (soaps, body lotions etc) and other products (like kitchen and laundry).The advisers said their client liked to use natural ingredients, like soy way instead of paraffin for candles, and botanical vitamin E instead of propylene glycol in the lotions. Its more than 130 products included candles priced from $12.95 to $44.95, and diffusers that sold for as much as $49.95. Deloitte said ECOYA’s products were stocked at 1400 retailers across the world including in Singapore, London and Ireland.

The business was pitched forecast $23 million net revenue for the 2023 financial year, and about $4 million in normalised EBITDA. Such numbers would represent 20 per cent compound annual growth at the revenue line and 92 per cent in terms of EBITDA, based on the three years to June 30 next year. Deloitte was reminding potential backers that ECOYA had a strong brand presence in the Asia Pacific market where home fragrance sales are forecast to reach US$2.7 billion and scented candle sales to $US1 billion by 2026.The business is expected to attract interest from Australian and offshore private equity firms, particularly those with experience in retail and consumer goods, and branded goods companies with deep pockets for a bolt-on acquisition."