“A really exciting step”: BWX acquires ethical online store Flora & Fauna for more than $27 million

Ethical online goods retailer Flora & Fauna has been acquired by BWX for a potential price of up to $30.8 million, just seven years after the e-store was founded in Sydney by Julie Mathers.

BWX Limited, an ASX-listed manufacturer and distributor of natural skin and hair care products, announced the acquisition on Monday, saying it will acquire 100% of Flora & Fauna for between $27.9 million to $30.8 million, depending on revenue for the rest of this financial year.

Julie Mathers, founder and chief executive of Flora & Fauna, says the acquisition is “a really exciting step” that aligns with her business’ values.

“This is a really exciting step for Flora & Fauna and the wider industry,” Mathers says.

“We are absolutely focused on sustainability and driving change, and BWX are onboard that bus with us,” she tells SmartCompany.

Mathers and her team of 47 staff will join BWX and work alongside the company’s other pureplay e-commerce business Nourished Life.

However, Mathers notes that Flora & Fauna will continue operating as an individual business.

“It’s really important for us that we keep doing what Flora & Fauna does, and that was absolutely talked about with BWX, and they are 100% on the same page,” she says.

Reaching new customers

Flora & Fauna currently sells products across 10 key categories from 300 domestic and international brands, with a focus on ethical, sustainable and vegan goods. The platform has 94,000 active customer accounts and over 300,000 unique monthly visitors.

The deal will help Flora & Fauna find new products, given BWX owns, produces, and distributes products under the Sukin, Derma Sukin, USpa, Edward Beale and Renew Skincare brands.

It will also allow Flora & Fauna to ramp up its marketing strategy.

“We need to reach new customers, we need more products, and we also really need to curate the products that are right for our customers,” Mathers says.

The acquisition comes after a period of strong growth, with Flora & Fauna recording revenue of $12 million in 2019-2020, up from $10 million the previous year.

Revenue for this financial year is expected to be between $16.4 million and $17.1 million.

A long process

Mathers says while she had built the business with growth in mind, it wasn’t until last September that she began seriously looking into a partnership.

“I think a lot of businesses to get to this point where they realise they will need outside help,” she says.

“It’s difficult to grow at a big level without getting help, and that’s really where we got to.”

After a few years working with Deloitte on an informal basis, Mathers sought advice from the consultancy firm in September last year to figure out how Flora & Fauna could access investment.

“But as with anyone who has ever been through a process like this, it’s long.”

BWX will fund the acquisition through a debt facility provided by its lender, which will be complete in July 2021.

David Fenlon, BWX chief executive, said the deal is in line with BWX’s omni-channel retail strategy and will expand the company’s online offering.

“We are thrilled to welcome the Flora & Fauna team to the BWX family, and alongside Nourished Life, create a best-in-class ethical online retail platform,” he said.

“Julie Mathers has built an incredible brand offering with her team and we are excited to work together in growing and leading the natural wellness industry.”