Aqua Bio Technology — M&A Activity 2023

Jul 23, 2023

Aqua Bio Technology ASA - agrees to acquire Skinteam Norge AS

Aqua Bio Technology ASA - agrees to acquire Skinteam Norge AS

23.7.2023 22:13:34 CEST | Aqua Bio Technology ASA | Inside information

Aqua Bio Technology ("ABT or the "Company") has today, on 23 July, entered into

a binding agreement in principle (the "Agreement ") with the Norwegian company

Skinteam Norge AS ("Skinteam") and its owners regarding the Company's

acquisition of all shares in Skinteam. The purchase price will be MNOK 45. The

purchase price will be used to subscribe for new shares in ABT at a subscription

price of NOK 3.

About Skinteam:

Skinteam is a retail chain that targets independent skin care and hairdressing

salons with "one stop shop" solutions. Skinteam offers a fully integrated

operating system for independent salons: online store, membership club, sales

training, product training, advertising, AI app and high-quality products. The

company was built up by the SATS founders Per Egil Borge and Bjørn Sigurd

Johansen. Skinteam offers independent salons a range of services, enabling them

to improve profitability without Skinteam assuming risk on the salons'

operational side.

Skinteam is today the largest player in Western Norway in skincare, with 3

wholly owned salons and close cooperation with 12 independent partner salons. In

total Skinteam currently has 15 skin and hairdressing salons.

All affiliated salons undertake to have Skinteam as the main supplier of

products, where appr. 80% of sales over the counter and 100% of professional

products used in treatment are purchased from Skinteam and where all income is

channeled through Skinteam centrally and paid to the partner salons in arrears

enabling Skinteam to capitalize on the growth in line with the salons' results

while taking limited liquidity risks.

* We are happy to become a central part of an exciting group with financial

muscles, wide network and a very interesting product portfolio. We, for our

part, together with our partners, will ensure provision for ABT's various

product series in a system of paid membership from consumers according to the

SATS model, nationally and internationally. We will grow quickly and by 2025

welcome 100 skincare salons and 200 hairdressing salons, all of whom will,

like those who are already members, experience positive development and safe

operation and future, says Per Egil Borge.

Unique member club:

Skinteam today has more than 1,000 paying members according to the model that

was developed in SATS. The memberships are either basic memberships or

memberships that include monthly treatments - at a higher price. All memberships

have a commitment period of 12 months, and are used across the verticals.

Membership gives Skinteam and the partner salons significantly more income while

the members' club provides valuable and increasing recurring income for

Skinteam.

Technological focus:

In general, in the wellness industry, there has been limited thinking and use of

digital innovation. Skinteam is developing a separate app where, among other

things, all club members, salons, salon customers, therapists, offers and

products will be part of the same ecosystem. This is estimated to be ready for

rollout in Q3 2023. This will be filled with content and continuously expanded

with new functions. In addition, Skinteam has developed an AI Skincare app. The

AI analysis technology, through a scanning, processes a unique and personalized

product program. The results are sent directly to the customer digitally.

Purchases in this way corresponds to consumption for 3 months, and the

additional sales of product kits for the salons increase significantly. The

AI-based skin and hair advice combined with product sales is creating a more

personalized shopping experience.

* Skinteam believes that our technology, combined with ABT's financial muscles

and ranges of product series will be a game changer in the market, says Per

Egil Borge.

ABT and Skinteam:

With the acquisition of Skinteam, ABT becomes a main producer and supplier of

the entire value chain within all of Skinteam's skincare salons and hair care

salons. ABT is confident that it will also be able to source, produce and supply

high quality hair care products to Skinteam's value chain for the hair salons.

ABT is thus entering a new market which is both large and lucrative.

ABTs CEO Håvard Lindstrøm says:

* This is a milestone for ABT, Skinteam and their combined shareholders. With

this acquisition, ABT establishes itself as a major supplier and distributor

in both skincare and hair care in Norway. The acquisition is part of ABT's

consolidation strategy and will be strategically correct for both companies

as Skinteam has strengths as an innovative distributor while ABT holds and

provides valuable IPR and cosmetic ingredients, controls the production of

its product series and will over time supply Skinteam with all the products

that its needs. The ambition is to establish ourselves as a major and

important player in the Nordic region during 2024. Together, we are building

a larger distribution network that will be profitable in itself, but also

interesting for other players in skin and hair care.

ABT expects that the acquisition will impact the forward-looking statements for

2023 as follows:

* Skinteam's revenues as of 30 June was above 25 MNOK and following the

acquisition it is expected that ABT, Cosmed Beauty and Skinteam will have

more than 100 MNOK in revenue on 12 months rolling basis from August 2023.

* During the same period it is expected that both ABT, Cosmed Beauty and

Skinteam will reach a positive EBITDA.

Strategy going forward:

ABT will continue to establish new agreements with third-party distributors in

the Nordics and the global market while continuing to assess the consolidation

opportunities as highlighted below.

Consolidation opportunities in the market:

Production and distribution of skincare products is a profitable industry, but

there are also low entry barriers for new brands and skincare retailers. The

Nordic cosmetic market is fragmented with many skincare retailers and pursuing

consolidation opportunities for further growth may therefore be beneficial for

ABT and its shareholders.

****

For further information, please contact CEO Håvard Lindstrøm mobile phone +47

941 32 288.

Aqua Bio Technology (ABT) is developing and commercializing sustainable

biotechnology for use in skincare products. ABT's cosmetics ingredients are

highly effective and they provide the cosmetics industry with natural

alternatives to traditional ingredients. ABT is also marketing and distributing

natural skincare products developed by partners towards consumers and

professional users. ABT's focus on commercialization and development of natural

ingredients and natural skincare products has been, and will continue to be, an

important part of the Company's strategy going forward. Aqua Bio Technology is

listed on the Euronext Expand market of the Oslo Stock Exchange.

DISCLOSURE REGULATION

This information is subject of the disclosure requirements pursuant to section

of 5-12 of the Norwegian Securities Trading Act.

CONTACTS

* Håvard Lindstrøm, 004794132288, hl@aquabiotech.no

ABOUT AQUA BIO TECHNOLOGY ASA

Aqua Bio Technology (ABT) is developing and commercializing sustainable

biotechnology for use in skin care products. ABT's cosmetics ingredients are

highly effective and they provide the cosmetics industry with natural

alternatives to traditional ingredients. ABT is also marketing and distributing

natural skin care products developed by partners towards consumers and

professional users. Aqua Bio Technology is listed on Euronext Expand.

ATTACHMENTS

Download announcement as PDF.pdf -

https://kommunikasjon.ntb.no/ir-files/17847556/2504/3472/Download%20announcement

%20as%20PDF.pdf