OraLabs selling to Chinese company

By Simon Pitman

- Last updated on GMT

Related tags Oral care Stock market

Following a flurry of activity that saw its shares rocket this
week, Colorado-based personal care provider OraLabs has confirmed
that it is selling up to a Chinese investment company, turning the
company private again.

According to an SEC filing, the OraLabs Holdings name is to be sold off to Partner Success Holdings, which owns steel and hardware businesses in China. It is believed that the primary objective of the deal is to give the company a stock exchange listing through a reverse merger process.

After the merger has completed the Chinese-owned company will be operated as a group of three separate companies under the trading name of China Precision Steel Inc.

OraLab founder Gary Schlatter will retain a small stake in the business that will enable him to continue as the owner of the newly formed OraLabs Inc.

According to other SEC filings, OraLabs had been struggling against low trading volumes and low stock prices, which had been further compounded by the fact that costs associated with trading as a public company have risen significantly in recent years.

At the beginning of this week OraLabs' share price jumped significantly after it published its latest results last Friday. Sales for the second quarter grew by 73 per cent for the quarter to reach $4.40m compared to the same period last year.

OraLabs said that the increase in sales was mainly attributable to increased in supplier demand, coupled with higher sales at the retail level during the trading period.

In turn net profits jumped to $453,992 for the quarter, compared to a loss of $2,926 in the corresponding quarter of 2005.

OraLabs has focused its attentions on particular niche oral care and personal care products. Indeed it is such niches that are currently contributing to major market growth for the oral care segment in general.

In the oral care category the company markets its Ice Drops range, which includes sprays and mouthwashes that are targeted at the youth market. For some time now market experts have been predicting that growth in the largely stagnant oral care sector will be driven by innovative niche products, such as this.

Likewise the company has also experienced strong sales in its expansive range of attention-grabbing lip balms, including lines such as Lip Naturals, Extra Lip Moisturizer and Lip Rageous.

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