API Acquires Clearskincare Clinics
Australian Pharmaceutical Industries Limited has now entered into binding agreements to acquire the assets of Clearskincare Clinics, which will soon become a franchised network. Known best for its running of Priceline pharmacies, API will be spending a cool $127.4 million, which will be paid in instalments over three years, initially acquiring a 50.1% controlling interest in the clinic business and 100% ownership of the skincare products business. Ownership of the clinic business is set to increase to 100% by September 2021.
Clearskincare Clinics is a leading provider of non-invasive aesthetic services such as laser hair removal, skin treatments and cosmetic injectables, and has grown from just two clinics in 2005 to its current 42 clinics in Australia, two in New Zealand and an exclusive skincare product range. Both API and Clearskincare Clinics share a clinical-retail focus and are experienced in operating with health professionals in regulated delivery environments.
This comes as another notable consolidation of the market, after Clearskincare Clinics’ rival Laser Clinics went to KKR last year for over $600 million (70+ locations) as well as Advent Partners becoming a majority stakeholder in SILK Laser Clinics earlier this year (12 locations).
Clearskincare Clinics largely focuses on specialty skin, anti-ageing, and acne treatments, which represent a large proportion of its revenue mix, and continues to invest in developing and introducing proprietary skincare products across these areas. Per capita consumption of aesthetic skin treatments in Australia is amongst the highest in the world, due in part, to Australia’s relatively harsh climate.
Founder and Clinical Director or Clearskincare Clinics Dr Philippa McCaffery said “both my business partner Alarna Longes and I are delighted to be joining API because the fit between the businesses works so well. Together we can take the Clearskincare Clinics experience to more customers across Australia and the skills of both businesses will really deliver on our growth potential.”
API Managing Director and CEO, Richard Vincent, says “The Acquisition fulfils our criteria for aligning with a robust business in a burgeoning sector of the health and beauty market, that is services-based and away from government funding.”
Vincent believes API’s Priceline customer base will be key to its success.
“Clearskincare Clinics is a disciplined, high-quality operation with a strong track record of profitable growth that fits with our proven complementary skill base. We expect to build scale and profitability because of our operational capabilities in franchising, network development and consumer products management. Also, API’s Priceline Pharmacy business and Clearskincare Clinics share the same core customers, which will enable us to leverage our marketing assets across both businesses.”
According to the Financial Review, the purchase should bump Ms Longes, aged 38, into the 2018 edition of AFR’s Young Rich List (Australians aged 40 or less) as the sale should net her of $40 million.