The BWX Ltd (ASX: BWX) share price has had a solid start to the week and is higher in morning trade.
At the time of writing the personal care company's shares are out of their trading halt and up 2.5% to $5.67.
On Friday the shares of the company behind the Sukin skincare brand were placed in a trading halt whilst it prepared to announce an acquisition and associated placement of shares.
That acquisition was for Sydney-based natural and organic skincare and health and wellbeing products company Nourished Life.
According to today's release, the acquisition of the online retailer will be for an initial consideration of $20 million plus a potential earn out.
This will be funded by a $16 million placement of shares to existing shareholders, with the remaining $4 million funded by an issue of BWX shares to the vendor.
Is it a good deal?
In FY 2018 Nourished Life is expected to generate over $25 million in net sales, with pro forma EBITDA forecast to be in excess of $4 million.
At 5x EBITDA I think that BWX has got itself a good deal here. Especially as the transaction is expected to be over 5% accretive to earnings per share based on a nine-month contribution.
Furthermore, management believes the BWX business as whole will be able to leverage Nourished Life's strong presence on social media platforms and engaged community of followers.
Should you invest?
I continue to believe that BWX is a great buy and hold investment option. Thanks to its expansion internationally and a couple of quality acquisitions, I believe the company can grow its sales significantly over the next few years.
In light of this, I would put it up there with a2 Milk Company Ltd (Australia) (ASX: A2M) as a great investment option in the consumer staples space.
