Ann: ASSET: TIL: Trilogy International acquires CS Company

• Release Date: 18/08/15 08:34
• Summary: ASSET: TIL: Trilogy International acquires CS Company
• Price Sensitive: No
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					TIL
18/08/2015 08:34
ASSET
PRICE SENSITIVE
REL: 0834 HRS Trilogy International Limited

ASSET: TIL: Trilogy International acquires CS Company

Trilogy to acquire cosmetics importer and distributor, CS Company
Trilogy International (NZX: TIL) announced today it will acquire CS Company
Limited (CS) - New Zealand's largest independent importer and distributor of
fragrances, cosmetics and toiletries - for a total consideration of $37
million plus any earn out payments.
CS is a privately owned New Zealand business, representing luxury fragrance
brands including Marc Jacobs, Calvin Klein, Dolce & Gabbana and Gucci and
cosmetics / beauty brands including Max Factor, Natio and OPI, as well as
many others.  Major suppliers include global industry heavyweights Coty,
Procter & Gamble and LMVH.
The current owners are CEO Ken Millar, COO/CFO Ray Guilford and Dianne
Reynolds, a senior executive in the business.  These key executives have
committed to remain in the business.
Based in Mangere, near Auckland Airport, the company has impressive
warehousing and distribution facilities, and a staff of 56, which includes
national sales coverage.
Trilogy Chairman, Geoff Ross, said the acquisition creates scale for Trilogy
International and the additional earnings will provide a platform for future
expansion.
The offer is made up of an up-front cash payment of $34 million, plus two
deferred payments of $1.5m on the first and second anniversary of the
acquisition. In addition, earn out payments will be paid on the third
anniversary of the acquisition on achievement of certain profitability
thresholds for the 31 March 2016 and 31 March 2017 financial years.
The acquisition, which will be funded entirely via bank debt, will be highly
earnings accretive to Trilogy International. On an annualised basis CS is
forecast to achieve revenue of $41m and EBITDA earnings of $6.4m in the full
year ended 31 March 2016. Earnings and revenue from completion, in August,
will be recorded in Trilogy International's results for 2016 financial year.
CS' Ken Millar said "this is a good opportunity for CS Company and will be a
key part of the business' next growth phase".
Mr Ross said the beauty market in New Zealand and internationally is growing
strongly and CS represents global beauty companies with expansion strategies.

"As a major player in the NZ beauty and cosmetics industry, CS compliments
our existing business, including very strong relationships with major retail
partners and a national sales network, as well as expertise in on-line sales
and the international beauty and cosmetics industry generally.
"Because the business is already performing well, we don't plan to make any
major changes through the earn out period. CS will operate as a stand-alone
entity and existing management will report to a subcommittee of the Trilogy
Board led by Stephen Sinclair"
Recently appointed CEO Angela Buglass will maintain responsibility for the
Trilogy, Ecoya and Goodness Brands, independent of the CS Distribution
business.

The existing Trilogy Group business is also performing strongly, recently
reporting net profit growth of 300% to $3.5m on forecast revenue of 23
million for the six months to September 2015.
Ends.
For more information please contact:

Geoff Ross
Chairman
021 424 219

CS Company Limited: Background Information
o Founded in 1976
o Largest independent importer and distributor of fragrances, cosmetics and
toiletries in New Zealand
o The Company operates two divisions: CS Prestige (prestige fragrances) and
CS Beauty (cosmetics, toiletries and gift lines)
o Products are sourced 85% from offshore (largely from Europe, USA and
Australia) and 15% locally
o CS Company has an extensive list of suppliers, and distributes 54 brands to
over 1,400 customer doors
o Key sales channels include:
o independent and national department stores
o discount retailers
o pharmacies
o hair salons; and
o supermarket chains.
o The senior management team comprises:
o Ken Millar, Chief Executive Officer: Ken is a qualified Pharmacist who
joined CS Company over 25 years ago
o Ray Guilford, Chief Operations Officer: Ray is a chartered accountant with
expertise in the export and distribution sectors
o Dianne Reynolds, General Manager Prestige Division
o Donna Gilray, General Manager Beauty Division
o The company employs more than 56 staff, with representatives and retail
support nationwide
o The Company's head office and warehouse are located in Mangere, Auckland
(close to Auckland Airport)

For more information please visit wwwcscompany.co.nz
End CA:00268565 For:TIL    Type:ASSET      Time:2015-08-18 08:34:49