Cosmetics distributor Heat Group has acquired a soap business as it continues to search for new acquisition opportunities ahead of an aggressive export program.
The plan to begin searching for new overseas markets was flagged last year when former Business Council president and Reserve Bank director Hugh Morgan was brought on as a new investor, but this is the first acquisition since then.
“We want to find new brands that we can export and that give us more consumer opportunities,” Heat Group chief executive Gillian Franklin told SmartCompany this morning.
Franklin announced the acquisition of Billie Goat Soap this morning. Founded in 2004, the company began supplying major retailers including David Jones, Myer and Target. Founded by Leanne Faulkner, the company manufactures products designed for consumers with sensitive skin or eczema.
Franklin says Heat Group, which has retail sales of more than $130 million a year, can provide the business with more back-end infrastructure.
“When I met with Leanne, she had continued to build the business quite considerably, and she approached me to see whether I would be willing to help her business, saying that she needed to grow.”
“While she was excellent in building the brand and the product, she just didn’t have that backup infrastructure.”
Although the business has been popular in Queensland, and has now been supplied to large chains, Franklin says the company can grow larger under the Heat Group umbrella – with Faulkner still on board.
“She’ll be retained. She’s an integral part of the business and she will continue to work within the company on brand development and other commitments.”
A purchase price was not disclosed, although Franklin said the result was a “fair deal” for both parties.
Franklin says the company is keen to start exporting, even though the Australian dollar remains high.
“We want to leverage relationships with our retailers, and we want brands that have growth potential – brands that are fun to sell and buy,” she says.
As a result, Heat Group will be looking for more brands.
“The businesses need to be run well, and they must meet certain criteria, such as specific financial characteristics of growth and earnings,” Franklin says.
“We want brands that we can export and those that give us new consumer opportunities. And that’s what we’ll be looking for.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
