Wellnex Life acquires Mr Bright teeth whitening brand, revenue ‘significantly’ grows in July and August

Wellnex Life (ASX: WNX) has entered a binding agreement to purchase the Mr Bright teeth whitening brand for $1.5 million in scrip, as revenue “significantly” increases in July and August.

Under a deal announced today, Wellnex will acquire Mr Bright for $1.5 million ordinary shares, with half to be escrowed for 12 months, and the other 50% escrowed for 24 months.

Settlement is expected to occur within 90 days – subject to shareholder approval.

The deal also comes with potential earnouts for FY2023 and FY2024 based on earnings before tax depreciation and amortisation (EBITDA) hurdles.

Commenting on the acquisition, Wellnex chief executive officer George Karafotias said the company was “overjoyed” to be adding to its diversified portfolio.

“We expect to increase the brand value for Mr Bright and grow revenue, margins and profitability for the wider Wellnex group.”

Mr Karafotias added the Mr Bright acquisition supports Wellnex’s strategy to deliver innovative and quality brands into the “fast growing” health and wellness market.

Mr Bright

The Mr Bright brand was established in 2016 and offers a “range of premium and effective” take home teeth whitening solutions.

According to Wellnex, Mr Bright uses the latest high-tech dental technology to “give consumers their own brilliant smile” safely.

Instead of the commonly harmful hydrogen peroxide used in teeth whitening, the Mr Bright products use glycerine, sodium bicarbonate and cranberry to deliver whitening agents to the enamel.

The products are currently distributed in the US, UK and online.

Wellnex plans to expand distribution of the Mr Bright products in Australia where penetration has been “poor” to-date.

“It is expected that Wellnex’s relationships will expand the distribution channels domestically – significantly increasing revenue and profitability,” the company stated.

Wellnex noted Mr Bright has seen strong year-on-year growth and an EBITDA margin of 20%. This is anticipated to increase as distribution channels grow and efficiencies are achieved post-acquisition.

In FY2022, annualised revenue for Mr Bright was about $4 million, while EBITDA was around $800,000.

Market Research predicts the global teeth whitening market will be worth US$8.2 billion by 2027.

FY2023 drives ‘significant growth’

The Mr Bright acquisition follows Wellnex’s revelation that it had achieved “significant growth” so far in FY2023.

Wellnex’s revenue for July and August reached $3.93 million, which is 46% higher than the same months in 2021.

Propelling this growth was continued month-on-month increases for Wellnex’s wholly-owned brands across pharmacy and grocery channels.

As a result of the growing revenue, Wellnex says it is on track to meet it guidance of $29 million for FY2023.

Further upside is possible with the launch of new products Ocean Road Dairies and Performance Inspired in the December quarter.