SLA - SILK Laser Australia

Founded in 2009, SILK is one of Australia’s largest specialist clinic networks, offering a range of non‑surgical aesthetic products and services.

SILK's five core offerings comprise laser hair removal, cosmetic injectables, skin treatments, body contouring and fat reduction services and Owned Brand skincare products.

SILK's mission is to enable all consumers to have access to high quality and high efficacy treatments. SILK aims to do this by providing high quality client service, using advanced technology, at affordable prices. SILK currently has 53 clinics in its network throughout metropolitan and regional Australia, with 37 clinics owned by SILK or operated as a joint venture, typically with a leading cosmetic injectable nurse, and 16 franchised clinics.

SILK clinics are typically located in a shopping centre or on a high street, with all clinics across the network utilising contemporary branding and a consistent design and layout. SILK has a strong presence on the west coast of Australia and growing operations in Queensland and New South Wales.

It is anticipated that SLK will list on the ASX during December 2020.

Raised $83 million at IPO and had a recent (Jun 2021) $20 million placement to insto's

SILK undertakes a $52 million strategic acquisition of Australian Skin Clinics and The Cosmetic Clinic in New Zealand, launches $20 million equity raising .

Clinic footprint expands to 117 with strong foothold on Australian East Coast and scaled entry into Victorian and New Zealand markets.

... And above IPO price (surprising for Covid times)

SILK beats FY21 Prospectus forecasts and upgrades guidance

.... Key FY21 highlights (vs FY20):
● Network cash sales up 68% to $85.1 million
● Reported revenue up 82% to $58.9 million
● Pro forma EBITDA up 180% to $17.3 million, 8% above upgraded guidance of $15 to 16 million
● Underlying EBITDA up 128% to $14.8 million
● Statutory NPAT up 123% to $5.2 million
● Pro forma NPAT up 839% to $7.5 million
● Cash flow from operations up 125% to $23.8 million
● 11 new SILK clinics opened in FY21, together with agreed $52 million acquisition of Australian Skin Clinics (ASC) / The Cosmetic Clinic (TCC) scaling Australian East Coast and New Zealand expansion efforts; takes the clinic footprint to 116
● Strong balance sheet with net cash of $44.1 million
● Average customer spend increased 28% to $605, reflecting strong growth in the injectables and body categories.

and, in a run for the hills moment, Private equity firm Advent Partners along with other pre-IPO investors whose stock was released from escrow on Wednesday have $33 million up for grabs at $3.70. It is Thursday; no point in hanging around.

Key FY22 highlights (vs FY21):
● Network cash sales up 91% to $162.7 million
● Reported revenue up 38% to $81.3 million
● Adjusted EBITDA up 27% to $22.0 million
● Statutory NPAT up 24% to $6.4 million
● Adjusted NPAT up 27% to $9.6 million
● 127 SILK clinics across network at 31 July 2022 (up from 61 at 30 June 2021)
● Strong balance sheet with cash of $18.6 million, and net debt of $3.8 million.

It had been a volatile time for Silk Laser during the pandemic. The company benefited from Australians spending more money on personal grooming during COVID-19 restrictions when it was able to reopen after lockdowns, at a time when work-from-home was encouraged, leading to a phenomenon known as "Zoom face".

Mr Perelman said the past few months had been challenging because of absenteeism and having to operate at partial capacity sometimes, with only two or three “rooms” in the venues up and running when the full capacity was five rooms.

.... Cosmetic surgery used to be a taboo subject. But now, you can talk about Botox and nobody raises an eyebrow.

still underwater since listing.

Have been cap raises to buy chains; Now at 127, SLA is aiming for a network of 150 outlets with the group aiming to reach that target by the end of calendar 2023, via more acquisitions and the opening of new stores

Dona Ferentes said:

still underwater since listing.

Click to expand...

there's a solution to that.

Wesfarmers Health proposal to acquire SILK Laser Australia

WES today announced that Australian Pharmaceutical Industries Pty Ltd (API), a wholly-owned subsidiary of Wesfarmers, has entered a Transaction Process Deed with SILK Laser Australia Limited (ASX: SLA) in relation to its non-binding, indicative proposal to acquire 100 per cent of SILK’s shares outstanding for $3.15 cash per share, by way of a Scheme of Arrangement.

SILK is one of the largest non-surgical aesthetics clinic operators in Australia and New Zealand with a network of over 140 clinics. If the Indicative Proposal is successful, SILK will become part of the Wesfarmers Health division, and will complement the division’s existing presence in the sector through its ownership and operation of Clear Skincare Clinics.

The all-cash consideration under the Indicative Proposal represents a 30.2 per cent premium to SILK’s last close price of $2.42 on 19 April 2023.

The Indicative Proposal provides for the payment of a fully-franked dividend of up to a maximum of 10 cents per share, with the cash consideration of $3.15 per share to be reduced by the cash component of any such dividend. The consideration represents an implied equity value for SILK of approximately $169 million, based on 53.8 million fully-diluted shares outstanding.

The SILK Board has granted Wesfarmers up to 30 business days to undertake exclusive due diligence, with potential to extend the exclusivity period for a further 10 business days in certain circumstances. During this exclusivity period, the parties will negotiate a Scheme Implementation Deed, reflecting the key commercial terms of the Indicative Proposal.

Dona Ferentes said:

Wesfarmers Health proposal to acquire SILK Laser Australia.

Click to expand...

Silk Laser has announced that Wesfarmers will not match a proposal from Hong Kong's EC Healthcare last Tuesday for the acquisition of 100 per cent of its shares at a price of $3.35 a share.

Dona Ferentes said:

Silk Laser has announced that Wesfarmers will not match a proposal from Hong Kong's EC Healthcare last Tuesday for the acquisition of 100 per cent of its shares at a price of $3.35 a share.

Click to expand...

Gotcha

SILK ENTERS INTO BINDING IMPLEMENTATION DEED WITH AUSTRALIAN PHARMACEUTICAL INDUSTRIES

Adelaide, South Australia: 26 June 2023:
SILK Laser Australia Limited (ASX:SLA) is pleased to announce that it has entered into a Scheme Implementation Deed with Australian Pharmaceutical Industries Pty Ltd (API) (a wholly-owned subsidiary of Wesfarmers Limited), under which API will acquire100% of the shares in SILK, by way of scheme of arrangement, for cash consideration of $3.35 cash per share.

Under the terms of the Scheme, SILK shareholders will be entitled to receive total cash consideration of $3.35 per share subject to all applicable conditions being satisfied or waived and the Scheme being implemented.

In addition, SILK will have the discretion to pay shareholders a fully franked dividend of up to a maximum of 10 cents per share, with the cash consideration of $3.35 to be reduced by the cash component of any such Permitted Dividend.

On November 30th, 2023, SILK Laser Australia Limited (SLA) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between SLA and its shareholders in connection with the acquisition of all the issued capital in SLA by Australian Pharmaceutical Industries Pty Ltd.