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Deloitte lights up auction for candle-maker ECOYA

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Candles and bodycare business ECOYA needs a new flame, and its asked Deloitte Corporate Finance to make the introductions.

Candle business ECOYA is up for sale. 

Deloitte’s dealmakers mailed out a six-page teaser to potential suitors in recent days, asking them to sign a confidentiality agreement to get an information memorandum and take part in what’s expected to be a two-part auction.

Deloitte pitched the ECOYA as a seller of “affordable luxury” home fragrance products in four segments: candles, diffusers, bodycare (soaps, body lotions etc) and other products (like kitchen and laundry).

The advisers said their client liked to use natural ingredients, like soy way instead of paraffin for candles, and botanical vitamin E instead of propylene glycol in the lotions.

Its more than 130 products included candles priced from $12.95 to $44.95, and diffusers that sold for as much as $49.95. Deloitte said ECOYA’s products were stocked at 1400 retailers across the world including in Singapore, London and Ireland.

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The business was pitched forecast $23 million net revenue for the 2023 financial year, and about $4 million in normalised EBITDA.

Such numbers would represent 20 per cent compound annual growth at the revenue line and 92 per cent in terms of EBITDA, based on the three years to June 30 next year.

Deloitte was reminding potential backers that ECOYA had a strong brand presence in the Asia Pacific market where home fragrance sales are forecast to reach US$2.7 billion and scented candle sales to $US1 billion by 2026.

The business is expected to attract interest from Australian and offshore private equity firms, particularly those with experience in retail and consumer goods, and branded goods companies with deep pockets for a bolt-on acquisition.

ECOYA was founded by Craig Schweighoffer in 2006, who had previously worked as the managing director vodka brand 42 Below, which was bought by Bacardi that year.

It listed on the New Zealand Stock Exchange in 2010 after a $NZ10.1 million initial public offering, which included Schweighoffer’s old 42 Below colleagues taking up a shareholding. During its listed life, ECOYA bought (and the even changed its ticker to) Trilogy and eventually also landed onthe ASX.

In 2018, CITIC Capital bought the Trilogy Group, which included the Trilogy, ECOYA, Goodness, Lanocreme and By Nature brands. The acquisition was from CITIC Capital China Partners III, a buyout fund which paid $NZ250 million.

Anthony Macdonald is a Chanticleer columnist. He is a former Street Talk co-editor and has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies. Connect with Anthony on Twitter. Email Anthony at a.macdonald@afr.com
Sarah Thompson has co-edited Street Talk since 2009, specialising in private equity, investment banking, M&A and equity capital markets stories. Prior to that, she spent 10 years in London as a markets and M&A reporter at Bloomberg and Dow Jones. Email Sarah at sarah.thompson@afr.com
Kanika Sood is a journalist based in Sydney who writes for the Street Talk column. Email Kanika at kanika.sood@afr.com.au

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