Venture Life Share Discussion Threads

[qs99] 06/8/2021 10:26

Good summary Riv

and yes expect ST to upgrade following this deal IMO/DYOR

[rivaldo] 06/8/2021 10:24

Cheers EC - so not only is the consideration nicely reduced, but it would seem that VLG are now paying just £4.7m for a baseline £1.2m EBITDA, which could rise substantially with synergies, partnerships etc. Looks very, very good.

[sev22] 06/8/2021 08:47

This is what Simon Thompson had to say after the previous acquisition back in June. I would expect an update next week and an increase in his target price following this morning's news.

Aim-traded Venture Life (VLG:92p), a developer, manufacturer and distributor of products for the self-care market, has announced the £36m acquisition of BBI Healthcare, a highly profitable global market leading women's health and diabetes/energy management company.

BBI’s key brands are Balance Activ, the leading UK brand for the treatment of bacterial vaginosis; Glucogel, the number one glucose gel prescribed in the UK for hypoglycemia; and Lift, a range of glucose gels, shots and chewable tablets. BBI owns all the IP associated with the brands which are sold or partnered across 27 countries. In addition, BBI has developed a new women’s health product and signed a distribution agreement with an [undisclosed] international partner for the new product to be launched under their own well-known brand in Europe, China and USA.

This is the first acquisition since Venture raised £34m placing and £2m open offer at 90p a share last November to fund its acquisition strategy. BBI reported adjusted cash profit of £2.6m on £10.2m revenue in 2020, and profits will be materially higher this year after taking account of product initiatives and cost synergies. In fact, the £36m acquisition has been priced on a “high single-digit cash profit multiple for 2021”, implying cash profit will grow by at least 50 per cent.

Moreover, there are multiple strategic benefits that will boost BBI’s profits in 2022 including cross-selling opportunities between Venture’s existing customer base, marketing BBI’s products through its enlarged distribution network, and utilising BBI’s manufacturing facilities in Sweden. They are currently running at 20 per cent capacity, thus offering a material opportunity to generate additional revenue by ramping up production.

Although the acquisition leaves Venture in a slightly positive net cash position, the group is putting in place a revolving credit facility to enable further acquisitions. Management expect to update the market soon on other deals in the pipeline including Project Vulcan, a company focused on oncology support therapies to treat the dermatological and oral side-effects of cancer treatments. Venture’s directors see an opportunity to increase the distribution of the brands' products into more territories using its own network of local partners, along with new partners. In 2019, Vulcan generated £3.5m in net sales and an estimated cash profit excess of £1.2m. The £5.5m consideration equates to 4.5 times cash profit.

The point is that although housebroker Cenkos Securities is holding fire on upgrading its estimates for now, then we are guaranteed some hefty uplifts later this summer. Analysts currently expect Venture’s cash profit (pre-BBI acquisition) to increase 14 per cent to £7m on 10 per cent higher revenue of £33.3m. However, a six-month contribution in 2021 from BBI would increase Venture’s cash profit to £9m, implying 50 per cent year-on-year growth. On an annualised basis, group cash profit run rate will be closer to £11m, or 83 per cent higher than in 2020.

This implies Venture is being valued on a multiple of 10 times annualised cash profit to enterprise valuation, a modest rating for a company that is set to generate further revenue and cost benefits from BBI and has a cracking track record of integrating acquisitions.

The key reason why the shares have doubled since I initiated coverage, at 45p, in my May 2019 Alpha Report is management’s ability to outperform. The BBI acquisition and imminent news of further bolt-on deals are set to support further earnings upgrades, and that’s simply not being priced in. I maintain my 130p target price. BUY.

[melody9999] 06/8/2021 08:42

EC 1066 - nice analysis. And I guess we wanted to see 2020 numbers before negotiating reduced price - hence the delay in doing the deal. If FX has worked in our favour, then thats a bonus. I'm happy with that.

[effortless cool] 06/8/2021 07:31

So Project Vulcan finally concludes! This is what they said about it back in November 2020, when they raised the funds to do this deal:

"In 2019, Vulcan generated £3.5 million in net sales and an estimated EBITDA in excess of £1.2 million. The Directors expect the consideration payable for Vulcan to be approximately £5.5 million on a cash free, debt free basis".

So £3.5m revenue might be considered the normal run rate, as opposed to £2.5m last year. They are paying about £0.8m less than originally mooted, so at least they have managed to negotiate the price down a bit over the last 9 months, although about a third of the saving is FX.

Target A and Target B remain outstanding:

"Target A" is a heritage brand in the UK and EU within the oral care market. Its product can be manufactured internally by the Group. The Directors see an opportunity to expand its niche customer base in the UK and internationally through the Group's distribution network. In the year ended 31 December 2019, Target A generated approximately £3.0 million in estimated net sales, with a margin in excess of 30 per cent. The Directors expect that the consideration payable for Target A would be in the region of £5 million".

"Target B" is a well-known heritage dermatological brand and is widely marketed in the UK. Its products are capable of being manufactured internally by the Group. As with Vulcan and Target A, the Directors have identified an opportunity to expand the product's distribution into global markets through the Group's network. The Directors consider that the Target B's valuation is in the approximate range of £15 to 20 million".

[qs99] 06/8/2021 07:17

Looks like a very astute deal IMO.

Good timing, decent products with high gross margin, immediately enhancing, attractive multiple paid, already known to VLG so ease of transition, possible other products to come out of this

Lovely job, well done management.

GLA and GWA
Cheers
QS99

[rivaldo] 06/8/2021 07:11

Looks like a very good acquisition of three oncology brands, two of which VLG already manufacture.

Immediately earnings-enhancing given £1.3m historic gross profit for a £4.7m consideration - and that was in the first pandemic year, so there should be a sharp increase in profits from here.

Especially with the various synergies and growth/partnering strategies which VLG can bring to the party:

[red ninja] 30/7/2021 14:30

Asian markets had a down day that may have sparked a bit of a sell off, given investors are impatiently waiting for more takeover news.

Lots of smallish sells, but I notice 3 x 50k + a 60k buys between 9-10.

Hopefully the larger trades buyer/s is/are smarter than the small trade sellers.

[qs99] 30/7/2021 13:41

Quiet and slipping. Any views?

[rachael777] 24/7/2021 13:25

are we due a trading update next week ? Its all gone very quiet so hopefully primed for a burst of activity (upwards hopefully!)

[tell sid] 20/7/2021 09:14

Great Trading Update from Alpha Growth (ALGW) showing strong growth:




Alpha Growth PLC
19 July 2021
Trading Update Q2 2021

Alpha Growth Plc (LSE: ALGW and OTCQB: ALPGF), a leading financial services specialist in the growing uncorrelated longevity asset class is very pleased to provide a trading update for Q2 2021.

Key Highlights for the quarter

-- Aggregate assets under control of the group have grown by circa $40m in the past quarter alone, increasing from $300m to circa $340m.

-- Providence Life Assurance Company (PLAC) has increased its balance sheet assets from $275m to over $308m, an increase of more than $33m.

-- The Black Oak Alpha Growth Fund has increased to circa $30m in assets, up from $22m at the beginning of the year and an increase of $4.5m in the past quarter alone.

-- A strategic relationship has been formed with Eaton Partners, a tier 1 capital introducer, to further accelerate growth in AUM. Eaton Partners have been instrumental in raising over $100bn in capital for funds since inception and are extremely well regarded in the industry.

-- Peter Gilman has been appointed as a special advisor to Alpha Growth. Peter is the former CEO and founder of Aegon Extraordinary Markets where he successfully built a business that generated revenues in excess of $2bn.

Alpha Growth has enjoyed an extremely strong first half of the year and continues to build upon its three main strategies; the following table outlines these strategies which have all been built around key client trends and market requirements.
/
Strategy: Separate Managed Accounts

As previously announced, the Company's discussions with one of the UK's largest and most prestigious asset managers to secure a short-term credit facility were almost concluded with the addition of direct asset investments by the asset manager, as well as the originally contemplated credit facility.

The UK asset manager to date has been working through internal underwriting and structuring issues which have delayed the approval for both the credit facility and direct asset purchase. We were anticipating a late April conclusion however the complexities of creating a framework for future additional investments by the asset manager, along with the challenges presented by Covid, have led to delays. Further announcements will be made in due course and we continue to work closely with them to ensure a successful conclusion.

The Company views its exercise with the UK asset manager as time well invested in developing its separate managed account strategy, this has increased the interest and exposure from other significant asset managers that we are now working with to offer a similar strategy to investors for similar asset purchase opportunities and/or credit facilities.

Alpha Growth is working with Eaton Partners, a tier 1 capital introducer and part of the global Stifel Financial Group, for introductions relating to separate managed accounts. This will substantially increase our marketing activity for this strategy and management expect that this will lead to significant growth.

The Company also continues to progress the Alpha Growth & Income (AGI) strategy, this strategy is a combination of life settlements and life contingent structured settlements hedged by a life insurance policy that is suitable for investors seeking cashflow and growth, funded in either a separate managed account or as a co-mingled fund with a minimum investment of $50 million. It is anticipated that this strategy will be complementary to PLAC's client base and separate managed account investors.

Strategy: The BlackOak Alpha Growth Fund

Further building upon the impressive growth rate of the BlackOak Alpha Growth Fund in the first quarter, the Fund closed the second quarter with circa $30 million in assets - An increase of $4.5m.

This significant increase has been driven by a combination of new investors, as well as additional contributions from existing investors. The 36% growth in net assets during the first 6 months of this year gives validation to this strategy and we expect to see continued strong growth through the remainder of this year and beyond.

With the additional contributions, the Fund has now in excess of 81 life settlements with a total face value of over $65 million and continues to add to the well diversified portfolio.

The Fund continues to grow its existing network of registered investment advisors who are the primary sources of the contributions.

Strategy: Providence Life Assurance Company Ltd.

The Directors continue to be pleased with the performance of its investment in Providence Life Assurance Company Ltd (PLAC). The acquisition and onboarding of the Company's Directors, Gobind Sahney and Jason Sutherland, is now complete and we are pleased to announce that the assets of PLAC as of the end of May 2021 totaled $308 million, this represents a significant increase from the previously reported $275 million.

As previously announced, we are planning to grow PLAC substantially by the execution of our build and buy strategy.

From a buy perspective, we continue to progress our strong pipeline of acquisition opportunities and will look forward to updating the market when appropriate.

From a build perspective, we continue to leverage PLAC's existing relationships with fund managers in the alternatives, fixed income, and equities space. We are very pleased to be working with fund managers from prestigious companies such as JP Morgan, Goldman Sachs, Coutts, Golub Capital, etc.

We are also pleased to name Peter Gilman as a special advisor to Alpha Growth. He is the founder and former CEO of AEGON's Extraordinary Markets, where he built a successful insurance business that generated annual revenues in excess of $2 billion dollars and contributed over $1 billion of embedded value to AEGON. He also developed various international strategies and HNW businesses that generated several billion dollars of revenue. We are looking forward to working closely with Peter in accelerating the growth of PLAC as well as bringing new strategies to Alpha.

Prospectus

The Company is working with its legal and accounting advisors to seek to meet the prospectus requirements against the background of an acquisition of an insurance group that has previously presented financial statements in line with Bermuda regulatory requirements but not the IFRS accounting standard which the Company adheres to. This entails liaising with the FCA as well as seeking additional accounting advice and may possibly require some additional updating of the insurance company's accounts. We appreciate the patience of our shareholders whilst we work through these issues.

We would like to clarify that the Company's closing of the transaction with the seller of Providence was originally conditional on the FCA approving the Prospectus, along with required Bermuda regulatory approvals. Once the Bermuda regulatory approvals were received, the seller wished to close and in conference with Pello, the Company's broker, the placing was completed as announced. The placing agreement was conditional on the shareholder approval at the Company's annual general meeting to issue new shares, and the Placing Shares were issued on 15 March 2021 as stated in our announcement on 8 March 2021. The issue of the Placing Shares was not specifically conditional on the publication of the Prospectus.

Once the FCA approves the Prospectus, the shares will be admitted for trading on the standard list of the London Stock Exchange as previously stated. A further announcement will be made once the Prospectus has been published.

Chairman Statement

Gobind Sahney, Alpha Growth Executive Chairman, stated, "We have enjoyed another very strong quarter of growth across our business and we are incredibly excited about some of the opportunities that the group has in the second half of this year.

Despite Covid naturally delaying some decision making, we have achieved market leading growth and remain extremely confident in the prospects of the group."

Gobind continued, "We are very pleased to welcome Peter Gilman as a special advisor to Alpha Growth and look forward to working with him as we accelerate our growth plans. We are also looking forward to working with Eaton Partners as we continue to deliver upon our goal of creating a substantial and fast-growing financial services company."

The key focus areas going forward are:

-- Increase assets across the group
-- Execute our build and buy strategy
-- Expand and grow all strategies
-- Seek new opportunities to meet client driven demand
-- Add specialized skill sets to the team

More information will be shared by the Company in due course.

[rivaldo] 20/7/2021 07:20

Encouraging news for VLG from Alliance Pharma's H1 trading update today:

"Kelo-cote(TM) delivered another very strong performance, with revenues in the Period up 54% to GBP21.9m (H1 2020: GBP14.2m), 62 % on a constant currency basis."

[qs99] 15/7/2021 17:27

So a month or so again before the next deal is announced despite them saying it was "near"! Blimey.....let's hope it is a good one!

[solarno lopez] 12/7/2021 08:19

All rather quiet

[red ninja] 22/6/2021 11:10

I'd say PI sellers taking their money off the table on inflation/interest rate worries.

[qs99] 22/6/2021 10:38

Pi sellers or insti with 10%+ pullback following deal? Looks odd no? If new deal is still in the offing? dyor

[qs99] 21/6/2021 07:08

Decent update on new facilities for enlarged group

Also sets it up nicely IMO for the next deal(s). DYOR

Cheers
QS99

[qs99] 18/6/2021 16:14

">....which will still leave significant firepower in our resources for further acquisitions, such as Project Vulcan, which is still in progress and we expect to update the market on soon."

so how long is "soon".....would like to think within 4 weeks of 7th June, so not long to wait to see if they can deliver their 2nd or even 3rd deal since placing in December. DYOR

[abergele] 18/6/2021 14:25

Dropping after my latest regular (ii) monthly top ups at 97@£1.02p...bahhh,supposed to be going tother way,,silly boy,,,about turn...quick march back please..

[qs99] 18/6/2021 13:59

Looks like the drip drip has started again until we see closure of the next transaction and then trading updates IMO....DYOR, patience required..

[rivaldo] 09/6/2021 10:52

Good to see buying coming in now at almost the full 102p offer price.

Cheers Red Ninja.

[red ninja] 09/6/2021 09:52

Downing Strategic Micro Capital I.T May fact sheet comment on VLG acquistion :-

"Post month end, Venture Life (+5.2%) announced the acquisition of BBI Healthcare for up to £36.0 million. This deploys the monies which the company raised in 2020. BBI has several brands targeting woman’s health and energy management, is headquartered in Wales,and has a manufacturing facility in Sweden. This is a strategic acquisition for Venture Life and should contribute high margins and returns on capital and a fast growing set of products."

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