Join our daily newsletter At The Bell to receive exclusive market insights
- Aussie skincare company Skin Elements (SKN) is set to acquire up to 40 per cent of Sambora for $850,000
- Sambora owns BeachToes, which is an Australian-made range of cruelty-free, natural nail polishes formulated to keep their quality and colour
- Skin Elements believes these products perfectly align with its existing natural and organic skincare products
- Before it can formally acquire the company, SKN will need to complete 60 days of due diligence and make a non-refundable payment of $50,000
- At the end of the September quarter, it had around $640,000 in the bank – which is noticeably less than the total acquisition price
- Alongside this morning’s announcement, the consumer stock suspended its shares ahead of an update to a $10.5 million underwriting agreement secured in April
- Skin Elements later provided an update saying it has received an advanced, interest-free sum of $500,000 through an unsecured loan from the underwriter
- Since releasing the update, shares have resumed trading and have gone up a healthy 28.8 per cent, to close at 9.4 cents
Skin Elements (SKN) has entered an agreement to acquire up to 40 per cent of Sambora who owns the Australian nail polish business, BeachToes.
Sambora is privately owned by Samuel Wendt in Perth, WA. The company was established in 2011 and, after extensive research and development, manufactured the BeachToes product range.
BeachToes products are Australian-made, cruelty-free, vegan, UV-protected nail polishes which are specially formulated to retain colour during intense outdoor wear.
They also source natural alternatives to replace the chemical ingredients found in most nail polishes and use marine bio-ceramics which is a natural and sustainably-source marine algae.
Over the past year, Sambora has sold over $175,000 worth of BeachToes products through its online store and global distributor channels.
Source: Skin Elements
Skin Elements is focused on natural and organic skincare products. Its main products include the Invisi-Shield Organics sanitiser range, Soléo Organics sunscreen, PapayaActivs skincare and the Elizabeth Jane Natural Cosmetics brand.
Due to its commitment to natural and clean skincare and beauty products, SKN considers BeachToes to be a perfect fit alongside its existing products.
To acquire a 40 per cent stake in Sambora and its BeachToes range, SKN will need to pay $850,000.
However, it must first pay a non-refundable fee of $50,000 to undertake a 60-day due diligence period.
At first, the deal caused some investors to scratch their heads as Skin had just $640,000 in the bank at the end of the September quarter.
As soon as SKN released this morning’s announcement, it requested a suspension in relation to advancing funds as part of the underwriting agreement announced in April this year.
The underwriting agreement was secured with State Securities and guaranteed Skin would receive $10.5 million by exercising SKN options by December 31 2020.
The company detailed it expected to resume trading by this Friday however, it has since announced the underwriter has agreed to advance $500,000 through an unsecured loan. SKN has confirmed it has received the interest-free advance.
Since releasing the update, shares have resumed trading and have gone up a healthy 28.8 per cent, to close at 9.4 cents.
