Zydus Wellness shares surge 7% on UK, EU foray on Comfort Click acquisition for £239 million

Shares of Zydus Wellness Ltd. gained as much as 7% on Monday, September 1, after the company announced its maiden overseas acquisition, buying UK-based Comfort Click in a deal worth £239 million.Comfort Click operates in the vitamins, minerals and supplements (VMS) segment, a market in Europe estimated to be worth about £11 billion.

The company has posted an impressive five-year CAGR of 57%, with revenues rising from £52 million in FY23 to £85 million in FY24, and further to £134 million in FY25.

The company reported an adjusted operating profit of £21 million, with margins of 15.6%, higher than Zydus Wellness’ own operating margins of about 14%. The acquisition values Comfort Click at 2x sales and 10x EBITDA.Zydus Wellness said the transaction is expected to be cash EPS accretive from the outset.

The company highlighted several strategic triggers from the deal:

– Comfort Click’s presence in complementary geographies.

– A business model with the majority of revenues from e-commerce and direct-to-consumer (D2C) channels.

– Access to UK and US markets for Zydus’ existing portfolio.

– Potential to introduce Comfort Click’s VMS products in India.

Under the share purchase agreement (SPA) signed with the sellers, Alidac acquired 100% of the outstanding ordinary shares of Class A and Class B, 71.43% of non-controlling ordinary shares of Class C, and 66.67% of non-controlling ordinary shares of Class D. As a result, CCL has become a wholly owned subsidiary of Alidac and a step-down subsidiary of Zydus Wellness.

CCL, headquartered in the UK, operates across the UK and Europe and is expanding its presence in the United States.