Canadian health and wellness company Pure to Pure Beauty Inc (CSE: PPB) has announced plans to acquire 51% of the “SunSeal by Microskin” brand of products from cosmetics vendor Corium Health.
The transaction is expected to provide Pure to Pure with a strong position in the sun care market and provide synergies with its existing portfolio of products.
Under the terms of a letter of intent between the companies, Pure to Pure will acquire 51% of a Corium subsidiary company which holds the SunSeal assets in return for 5 million ordinary shares and performance payments based on the subsidiary’s revenue and EBITDA (earnings before interest, taxation, depreciation and amortisation).
The deal also requires the companies to work together to further develop the SunSeal business, with Corium having the right to appoint a director to Pure to Pure’s board.
A definitive agreement will include a call option granting Pure to Pure the right to acquire a further 29% of the subsidiary for an additional $300,000 consideration, which may be satisfied through the issue of additional shares.
All Pure to Pure shares issued in connection with the acquisition will be subject to a six-month pooling arrangement to encourage Corium to invest in the success of the venture.
Second skin protection
SunSeal was developed by Corium to offer the highest level of sunscreen protection by forming a “simulated second skin” for users that lasts up to three days.
The patented technology is manufactured to the highest industry standards to protect from UVB rays which burn the skin and UVA rays which cause premature ageing.
It is marketed as non-absorbing, breathable and completely waterproof and has been tested by the world’s foremost sunscreen formulation laboratory in Sydney, Australia which showed the formulation remained 93% effective after being submerged in water for seven days.
SunSeal has received approval from the Australian Therapeutic Goods Administration and is also approved for use in the UK and across the European Union.
An application is currently being prepared for approval by the US Food and Drug Administration.