Biotech company Zoono Group (ASX: ZNO) has clinched an exclusive deal with Australian builder Johns Lyng Group (ASX: JLG) for the distribution of sanitisers that have tested 99.99% effective against a COVID-19 surrogate virus.
The exclusive distribution agreement will make Johns Lyng’s New South Wales-based building remediation subsidiary, RestorX Australia, an exclusive distributor for Zoono products manufactured for sale in 5L containers and 1,000L totes.
The deal is intended for the business-to-business market, with Johns Lyng stating plans to make the products broadly available in Australian commercial markets with a specific focus on the 70,000-plus strata titles it manages through another subsidiary, Bright & Duggan.
Johns Lyng said Zoono’s sanitisers will be for use on domestic and commercial buildings, as well as in the clean-up of educational and healthcare facilities.
Today’s news follows Zoono’s February and March announcements that its Z-71 Microbe Shield surface sanitiser and Germ Free24 hand sanitiser tested 99.99% effective against the feline coronavirus, a surrogate for the COVID-19 virus.
COVID-19 heightens demand for deep cleaning and sanitisation
In late March, Johns Lyng told the market it was already managing an “unprecedented level of demand” for its building services, exacerbated by recent extreme weather events including Australia’s catastrophic bushfires over the summer.
Now, Johns Lyng chief executive officer Scott Didier said RestorX has registered a “high level of demand” in the wake of the COVID-19 and will incorporate Zoono’s products into its deep hygiene cleaning and microbial control protocols.
“It will be critical for people and businesses to get back to normal operations as quickly as possible as the virus threat passes and that will involve disinfecting and deep cleaning of buildings, facilities and surfaces,” he said.
““We’re already seeing strong demand for preparation of buildings for a return to normal operations and that’s where this product is going to be really important,” Mr Didier said.
Zoono chief executive officer Paul Hyslop commented on the agreement in a separate announcement to the market.
“[Johns Lyng] have national coverage and can provide Zoono with distribution and warehousing into all [business-to-business] sectors, including via access to its very large customer base,” he said.
Johns Lyng, which has more than 800 employees across 21 locations in Australia, is now establishing a specific Zoono division within its organisation.
Terms of the deal
The distribution agreement has an initial term of five years with a right of renewal for a further five years. All products will be sold and distributed under the Zoono brand.
Johns Lyng is required to purchase a minimum $5 million of product in the first year, $6 million in the second year and $7 million in the third year, with minimum annual purchase targets increasing by 5% per annum thereafter.
Zoono has the right to terminate the deal if target minimum purchases are not achieved.
The exclusivity of the deal has the limited exception of existing animal health, veterinary and other customers which have already directly entered into supply and distribution agreements with Zoono.
The company also recently inked distribution deals with Eagle Health (ASX: EHH) for retail sales of its co-branded antimicrobial products in China, and with Al Rabban Capital for the distribution of Zoono products in the Middle East and North Africa.