New Clicks Holdings, who run Clicks stores in South Africa, has entered into an agreement to buy a 94-store haircare franchise in Australia, the company said on Wednesday.
Trevor Honneysett, head of New Clicks, said the Price Attack franchise was acquired for R89-million and would be funded internally.
”With Price Attack, turnover in this geography will now be boosted by an extra R452-million to around R2,270-million,” he said.
”The business is profitable and there is a high level of synergy within our multibrand strategy.”
Honneysett said comprehensive due diligence had been concluded and an upfront cash payment of R67-million would be made with up to a further R22-million payable in cash at specified future dates based on a R22-million earnings before interest and tax profit warranty. The impact on New Clicks’ net asset value per share and earnings per share in the current financial year is not expected to be material.
Price Attack, founded in 1989 in Queensland, Australia by entrepreneur Gary Jackson, operates speciality stores incorporating hair salons in major retail centres throughout mainland Australia.
The retail segment of Price Attack carries over 3 000 product lines through a range of haircare, skincare, handcare and cosmetic products and accessories. The deal is expected to be completed on July 2. Honneysett said the Price Attack acquisition would raise New Clicks’ profile in the Australian market and increases its share of the haircare market.
”Significantly, it also paves the way for other brands in the transnational New Clicks group, such as Clicks and Priceline, to launch new private label haircare product via a strategic alliance with the vendor,” he said.
Jeff Sher, head of New Clicks in Australia, said the company would now become a major market player in haircare. ”There is potential to expand the Australian Price Attack franchise from a current 94 stores to around 150, by leveraging off the existing corporate services platform with minimal additional investment,” he said.
”In time, we believe the brand concept could travel.” – Sapa