Nextera acquires cosmetic producer

By Simon Pitman

- Last updated on GMT

Related tags Stock Cosmetics

Nextera Enterprises has acquired niche cosmetics producer Woodridge
Labs for $23.5m in cash, as part of the company's plans to expand
its presence into key areas of the fragmented personal care market.

"The Company provides a solid platform for organic growth through both the development of new products and expanded distribution through additional channels,"​ Richard Sandler, Chairman of the Board of Directors of Nextera Enterprises said.

"The business also provides opportunities for external growth through expansion into complementary areas of the fragmented personal care market,"​ he added.

The deal means that, W Lab Acquisition, a wholly-owned subsidiary of Nextera, has acquired the assets and some of the debts of Woodridge Labs and approximately 8.4 million shares of Nextera common stock. The stocks represent 20 per cent of the post-transaction outstanding common stock of Nextera.

The name W Lab will be dropped after the acquisition is completed and the company will continue to trade under the Woodridge Labs name, the company said.

The terms of the deal mean that Woodbridge Labs might earn up to $2.5m from the deal, which will be tied into the company's earnings for this year, and will be fully paid if earnings come in as much as $6.5m.

Nextera said that the acquisition was financed using a combination of its existing cash resources and a new $15m senior secured credit facility provided by. NewStar Financial

Woodbridge Labs produces a diverse range of targeted personal care products that are distributed throughout the US. Generally the products are reasonably well-known, but not major household names.

Headquartered in Van Nuys, California, Woodridge's core brands includes the Vita-K skincare range, which targets a variety of problem skin conditions, including bruising, stretch marks and spider veins, Other core brands include the DermaFreeze 365 anti-wrinkle treatment, UnderEyeBryten and the Bath Lounge range.

All of these brands are marketed as being cheaper alternatives to more expensive dermatological products on the market and generally target mature consumers. They are available in approximately 21,000 stores across North America, including Wal-Mart and Walgreens.

Nextera was formed in 1997, principally as an investment unit, but the company has not had a smooth ride, particularly since its public offering in May 1999.

Further difficulties have come about in the past two years, culminating in a $2m turnover in 2005 and an operating loss that threatened the company with liquidation until it secured the Woodbridge buyout.

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