dusk (ASX:DSK) acquires Eroma Group

• dusk Group Limited (DSK) to acquire Eroma Group, a supplier of candle making inputs, for an enterprise value of $28 million
• The acquisition comprises $15 million in cash and a $13 million placement of ordinary shares in dusk issued to all Eroma shareholders
• Eroma will continue to operate as a standalone business within dusk Group, led by CEO Shane McGrath
• The acquisition is expected to deliver pro forma earnings per share accretion from year one of over 20 per cent
• dusk Group Limited (DSK) was last traded at $2.92 on December 16

dusk Group Limited (DSK) is to acquire 100 per cent of Eroma Group, a supplier of candle making inputs, for an enterprise value of $28 million.

The acquisition comprises $15 million in cash and a $13 million placement of ordinary shares in dusk issued to all Eroma shareholders.

Eroma will continue to operate as a standalone business within dusk Group, led by its current CEO Shane McGrath.

dusk said the acquisition is complementary to its existing offering and provides the dusk Group with strong growth potential.

It will enable dusk to increase its total addressable market by acquiring an adjacent but non-competitive leader in the small maker supplier segment.

It also increases buying power for common input costs and unlocks an in-house supply opportunity for dusk’s products.

The acquisition is expected to deliver pro forma earnings per share accretion from year one of over 20 per cent.

There is no change to dusk’s dividend payout policy.

Eroma has over 30,000 active customers and its database is broad and growing.

Fifty-five per cent of Eroma is owned by founder and CEO Shane McGrath, and the remaining shares are owned by private investors.

Eroma is a largely online business, which will enhance dusk’s online presence and complement its physical retail offering.

The company has developed and owns the recipe for over 900 fragrance formulations.

dusk Group Limited (DSK) was last traded at $2.92 on December 16.