KUALA LUMPUR (May 10): Personal care products retailer InNature Bhd (KL:INNATURE) said on Friday that it is acquiring the operator of Burger & Lobster restaurants for RM21.25 million in a related-party deal as part of a diversification plan.
InNature will pay RM14.6 million for the acquisition of Blu Restaurant Sdn Bhd with proceeds from its 2020 initial public offering, the company said in an exchange filing. The remainder of the price will be paid with internally-generated cash, it noted.
“The proposed acquisition provides an avenue for the group to expand into the food-and-beverage business,” InNature said. Further, the company will gain immediate access to the resources of Blu Restaurant “including expertise of existing management team, manpower and equipment,” it added.
Blu Restaurant has exclusive rights to the Burger & Lobster brand in Malaysia, Indonesia and Vietnam, though it only has one outlet at the Suria KLCC mall that has been in operation since October 2022. The acquisition values Blu Restaurant at about eight times its 2023 net profit of about RM2.55 million.
InNature derives nearly all of its revenue from selling cosmetics and personal care products at over 120 The Body Shop stores. The acquisition comes at a time when the company is grappling with slump in profits, as sales declined and expenses rose.
The company is also dealing with the fallout from the restructuring of The Body Shop UK — the brand’s home market — after it was placed into administration in February by German private equity firm Aurelius.
Income generated from the food-and-beverage business would account for 24.3% of its net profit, and the company expects it to rise to 25% or more in the future, InNature said. The company will seek shareholders’ approval for the diversification, at an extraordinary meeting tentatively on June 27, it said.
Blu Restaurant is currently controlled by InNature’s chairman Datuk Simon Foong and managing director Mina Cheah, who is also Foong’s wife, making the proposed acquisition a related-party transaction under listing regulations.
Cheah, Foong, and their two sons collectively hold about 70.6% in InNature via four private companies.
The company, which expects the acquisition to be completed by the third quarter, appointed cfSolutions Sdn Bhd as independent advisers to advise other directors and shareholders.