BEHIND THE HEADLINES
Listed cosmetic injections and skincare group Silk Laser Clinics has announced its acquisition of Australian Skin Clinics and the Cosmetic Clinic in New Zealand, according to a media report. The acquisition, worth $52 million, will increase Silk Laser’s outlets from 61 to 117, of which 14 are located in New Zealand. The company estimates there will be up to $500,000 in synergy savings and limited cross-over in locations. The Australian Competition and Consumer Commission will not conduct a public review into the acquisition, reportedly indicating it has no concerns over reduced competition in the industry.
Beauty chain acquires rival in $52m deal
Listed cosmetic injections and skincare group Silk Laser Clinics has announced its acquisition of Australian Skin Clinics and the Cosmetic Clinic in New Zealand, according to a media report. The acquisition, worth $52 million, will increase Silk Laser’s outlets from 61 to 117, of which 14 are located in New Zealand.
The company estimates there will be up to $500,000 in synergy savings and limited cross-over in locations. The Australian Competition and Consumer Commission will not conduct a public review into the acquisition, reportedly indicating it has no concerns over reduced competition in the industry.
Real estate portal acquires mortgage chain
Listed online real estate advertising company, REA Group, has acquired franchised mortgage broker Mortgage Choice in a deal worth $244 million, according to a media report. Mortgage Choice now joins REA-owned franchised broking business Smartline, effectively making REA Australia’s fourth largest mortgage broker with a 6.5 per cent market share after the acquisition. In addition,
REA has invested $15 million for a 34 per cent share in mortgage processing software company, Simpology. The software is designed to expedite the processing of mortgage applications which, due to an influx of loan applications, has been taking lenders up to eight weeks to approve.
Australian Domino’s operator enters 10th foreign market
Australia’s largest pizza chain Domino’s Pizza Enterprises (DPE) has entered a 10th international market through its $79 million acquisition of Domino’s Taiwan, according to a company statement.
Domino’s Taiwan, operated by PizzaVest Company Limited, currently operates 157 corporate and franchised restaurants and, given Taiwan’s population of more than 23.5 million people, expands DPE’s Asian market by more than 18 per cent to 150 million people. DPE has increased its future store count outlook in Asia to 1,900 stores by 2032 as a result of the acquisition. Meanwhile, DPE has also opened its 800th store in Japan less than 12 months after opening its 700th store there.
Court rejects disgraced franchisor’s appeal
The full Federal Court has dismissed an appeal by mobile service franchisor Geowash Pty Ltd against a previous court finding that they knowingly breached Australian Consumer Law (ACL) and the Franchising Code of Conduct, according to an Australian Competition and Consumer Commission statement.
A three-year investigation into Geowash began in 2016, the same year it was placed into voluntary administration. In 2019 it was found guilty of offences including acting unconscionably and making false and misleading representations, among other things, and went into liquidation in April. The company was fined $4.2 million in January 2020, including $1.045 million against its former hand car wash and detailing company director Sanam Ali, and $656,000 against national franchise manager Charles Cameron. Ali and Cameron were also disqualified from managing corporations in Australia for five and four years respectively. All penalties and disqualifications remain unchanged.
Fuel retailer on track to complete brand conversion
Listed fuel retailer Ampol, formerly known as Caltex Australia, is on target to complete the brand conversion of its entire network before the end of 2022, according to a media report.
To date 300 petrol stations have been rebadged in 2021, out of a total of 1,900 sites in the company’s nationwide fuel network. The re-brand which brings the 80-year-old Ampol badge back to Australian service stations was initiated in 2020 after international fuel giant Chevron terminated a licensing agreement for the use of the Caltex brand. The company views its future strategic direction as an energy distributor as it adds electric charging stations and potentially hydrogen for a new generation of gas-powered vehicles to its outlets, as well as expanding its grocery offer.
Major chain settles franchisee class action
Convenience 7-Eleven has confirmed that a non-binding in principle agreement to settle a franchisee class action has been reached, subject to the approval of the Federal Court and subject to an agreement of the terms of a settlement deed, according to a media report. The process began in 2017 when a group of current and former franchisees alleged contract breaches, misleading and deceptive conduct, and unconscionable conduct by the company. Additional allegations were also made that the ANZ bank had provided loans that were unsustainable.
Class actions brew over business interruption claims
Global insurers Lloyds and QBE are facing class action lawsuits in the Federal Court, with up to 25,000 Australian businesses potentially eligible to compensation for rejected claims and missed opportunities, according to a media report. Insurers have argued that business interruption policies were never intended to cover pandemics, rather than losses associated with extreme weather events such as fires or flood. However, an error in policy wording indicates otherwise with clauses excluding pandemics referred to an outdated parliamentary act.
Fitness chain completes listing with $2b valuation
Australian-based fitness chain F45 has listed on the New York Stock Exchange closing its first day with shares closing USD20cents above the listing price of USD$16, resulting in a market valuation of USD$1.46 billion (AUD$2 billion), according to a media report. F45’s Australian chief executive and cofounder’s 25.4% stake is worth an estimated USD$357 million following the listing, however, the brand’s original two founders sold their equity well before the listing, and missed the sharemarket windfall. F45 operates 1,555 studios in 63 countries around the world and was previously scheduled to list US NASDAQ exchange in late 2020, but was delayed due to the pandemic.
Pharmacy owner rejects takeover offer
Wholesale pharmaceutical distributor and Priceline Pharmacy franchisor, Australian Pharmaceuticals Industries (API), has rejected a takeover offer of $687 billion from multibrand conglomerate Wesfarmers, according to a media report.
API described Wesfarmer’s unsolicited, conditional, and non-binding bid of $1.38 per share as “not compelling” and opportunistic given that the offer was made on the same day that API announced a full-year earnings downgrade driven by COVID-related trading restrictions. Regardless of API’s decision, Wesfarmers has already secured a significant shareholding in the business through a deal with Washington H Soul Pattinson which currently owns 19.3% of API. Brands operating under Wesfarmer’s umbrella include Bunnings and Officeworks.