Pharmacy group Clicks is expected to acquire beauty salon chain Sorbet Holdings from its stockholder Old Mutual Private Equity for R105-million, extending its stake of 25% to full ownership.
“The transaction will result in the Clicks Group holding 100% of the issued share capital of all Sorbet group entities. This includes Sorbet Brands in which the Clicks Group has held a 25% investment since 2015. Sorbet Brands holds the Sorbet intellectual property,” Clicks said on Thursday.
Clicks Group is South Africa’s leading health, beauty, and wellness retailer with an extended pharmaceutical offering. The group, which was founded 50 years ago, has a footprint of over 830 stores and 670 pharmacies spread out across the country.
Its market cap has reached more than R71.99-billion with a market share of R295.07, which went up by 0.51% on Thursday.
Beauty hub Sorbet, on the other hand, has a footprint of 200 stores countrywide. The group is owned by Old Mutual Private Equity. Co-head of the equity, Jacci Myburgh, has said that Clicks is a “logical owner” of Sorbet, because of its 25% stake in Sorbet Brands.
Myburgh said Sorbet, which was acquired as part of Old Mutual’s Long4Life delisting, is better off sold because “it is below a size of investment” that the equity would typically hold, noting that selling it has always been on the agenda.
“We acquired Sorbet as part of the Long4Life delisting. As Sorbet is below the size of investment that we would typically hold, our intent was always to sell the business to an appropriate owner.
“Clicks is a logical owner of Sorbet given that it is an existing joint venture stakeholder in the Sorbet Brand,” he said.
The acquisition will ensure that Sorbet products are perpetually sold at Clicks stores. Confirming the deal, Clicks executive officer, Bertha Engelbrecht, said the two brands are aligned in terms of offering.
She said since Clicks acquired its 25% stake in 2015, it has worked closely with Sorbet and developed a vision to continue the partnership in perpetuity.
“Sorbet has a natural strategic fit and is closely aligned with Clicks Group’s health, beauty and wellness offering. Sorbet is a highly trusted brand with a loyal and growing customer base, and we aim to capitalise on the opportunities to expand our presence together and accelerate revenue growth,” said Engelbrecht.
Sorbet Group CEO Linda Sinclair also weighed in on the proposed transaction, saying the company has had a good relationship with Clicks since 2011, and added that it is looking forward to the opportunity of growth.
“Sorbet has walked a successful road with Clicks since becoming an affinity partner in 2011 and then Clicks Group investing in Sorbet Brands in 2015,,” Sinclair said.
“Clicks has played an instrumental role in supporting the growth of Sorbet into becoming a leading professional beauty and grooming franchise brand. Our values are strongly aligned with Clicks, and we look forward to delivering on future growth opportunities as part of the Clicks Group.”
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