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Ecoya Advances Into Skincare: Buys 100% Of Leading Natural Skincare Company Trilogy

Fuseworks Media
Fuseworks Media
Ecoya Advances Into Skincare: Buys 100% Of Leading Natural Skincare Company Trilogy

Ecoya Limited (NZX: ECO) has entered into an unconditional agreement to purchase 100 per cent of Trilogy Natural Products Limited, New Zealand's leader in natural skincare products.

Ecoya executive chairman Geoff Ross says the addition of a brand of skincare products to Ecoya's range of home fragrance and body and bath products is a natural progression for the company and one it has been considering since inception.

"Trilogy is a leader in Australasia and it shares similar views to us on natural ingredients and the emerging opportunities in the affordable luxury category. Our respective cultures also have much in common. We are excited by the fact that we now have two brands in our portfolio.

"There are also distribution synergies," Ross says. "Trilogy is very active in the UK and Ireland - it is now in selected Boots stores for example - but has no presence in the US. Ecoya hasn't entered the UK yet, but is well underway in the US.

"Ecoya is in David Jones, Trilogy is in Myer. Trilogy's home market strength is in New Zealand. Ecoya's is in Australia. So there are many areas we can work together in all our markets."

Ross says Ecoya is confident of meeting its prospectus revenue forecast with Ecoya currently trading to plan and sales so far for the current year around double what they were for the same period last year.

He says Trilogy is profitable and December 2009 calendar year generated revenues of $9.3m.

"This acquisition will considerably increase overall revenue and reduce Ecoya projected losses this year. We expect the combined entity to be profitable next financial year"

Trilogy was founded by sisters Sarah Gibbs and Catherine de Groot in 2002 in Wellington. During 2006, 2007 and 2008 Trilogy featured in the Deloitte Fast 50 list and has had 32 per cent annual compound growth since 2006. Trilogy's award winning range of 40 products is sold in 3500 stores in 16 international markets throughout Australasia, the UK, Ireland and Asia.

Trilogy CEO and co-founder Sarah Gibbs says the respective management teams have closely-aligned views.

"We can see Trilogy's growth continuing within Ecoya in the near future. We have worked hard to build Trilogy into a leader in natural skincare in Australasia and an award winning, respected brand in the United Kingdom and Ireland. Trilogy and Ecoya share a management style and team culture driven by creativity and differentiation and a focus on developing high quality accessible products. We believe that in developing the business globally we will be more powerful together than we would be as separate businesses."

Both Sarah and Catherine will be staying in their current roles during the earn out period and then likely in an advisory capacity from then on.

Ecoya is paying $10m for Trilogy shares now and when the 2011 calendar year's EBITDA is finalised an earn out payment will be made, Ross says. The maximum earn out payable will be $10m half of which will be paid in cash and half in Ecoya shares issued at $1 each.

The deal is unconditional and is being funded by the raising of new equity and debt for the settlement on 17 September. The Equity raise is underpinned by The Business Bakery LP and Craigs Investment Partners.

He says the purchase will have no impact on the funds raised for the Ecoya brand in the listing and the Ecoya business plan is to remain as it is, extending the Ecoya range and growing into US and selected Asian cities.

Ecoya is now in Hong Kong department store chain Lane Crawford and Beverly Hills Four Seasons Hotel and other stores in Los Angeles.

"We have spent a lot of time working on this deal and believe it will be a big leap forward for the Ecoya business," says Ross

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