Star Combo Pharma Ltd (ASX:S66) has signed a heads of agreement (HoA) to acquire the Ausway Group of companies.
The group includes Ausway Pharmaceutical Pty Ltd, Austoyou Group Pty Limited and Koala Mall Pty Limited.
Notably, the companies generate revenues in excess of $18 million with positive earnings.
E-commerce platform sells directly into China
Ausway specialises in the supply and distribution of vitamins and dietary supplements both in Australia and overseas with a particular emphasis on its e-commerce platform which sells directly into China.
Star Combo’s managing director Star Zhang said: “I am very pleased to have the opportunity to potentially join the complementary businesses of Star Combo and Ausway as there are significant synergies between the two businesses that will underpin a successful future for our company.”
Successful May 2018 IPO
Star Combo listed on the ASX in May 2018 after a successful initial public offering (IPO) which raised $5.8 million through the issue of 11.6 million shares priced at $0.50.
Star Combo was established in 2004 and is an Australian nutritional products business that develops, manufactures and distributes a range of branded vitamins and skincare products.
The company services Australia and growing offshore markets, particularly in Asia.
Holds a TGA licence
The group’s operational entity, Costar Pharma Laboratory Pty Ltd holds a Therapeutic Goods Administration (TGA) licence that permits it to manufacture soft and hard capsules, powders and granules and tablets.
The TGA licence requires compliance with certain regulations that dictate manufacturing compliance to strict quality standards.
Multi-billion dollar vitamins and dietary supplement market
Star Combo operates and sells its products in the vitamins and dietary supplement market (VDS) to consumers in Australia and in international markets, including Vietnam, Korea and China.
The VDS market in Australia reached $2.67 billion in revenue in 2016.
Accordingly, the company plans to continue operating in the Australian market, and expand its operations to meet the booming demand for Australian made VDS products in international markets such as China.