"MADARA Cosmetics AS has signed a binding agreement with Oy Transmeri Ab (‘Transmeri’) for the asset-based carve-out and future contract manufacturing facilitation for the MOSSA brand," said a market statement.
"Since the launch of the MOSSA brand in 2014 its sales have largely retained a ca.10% share of overall turnover. This reflects the dedication which has been directed towards growing the flagship MADARA brand across many different geographical markets as the Company’s primary corporate identity," said the note.
"The MOSSA brand has had a different distribution strategy due to its design for mass retail channels. This transaction is expected to secure further MOSSA brand growth in the Finnish market, while at the same time boosting contract manufacturing capacity volumes. The Company will retain ongoing product development responsibility for MOSSA," said the statement.
“Efficient use of corporate resources is critical in creating long-term shareholder value. The transaction not only enables us to re-focus on our core strengths – MADARA corporate and brand long-term strategy execution, it also confirms the Company’s ability to generate valuable brand-related assets. Particular attention will be towards MADARA brand awareness building in France, Germany and Sweden,” said Gunta Šulte, CEO of AS MADARA Cosmetics.
The value of the deal is EUR 4 million and closing of the transaction is expected on April 30, 2024.
Madara's management reiterated that it is set to achieve turnover growth of at least 10% in 2024 (ie. EUR 22.25 million) compared to the previous year.
Madara has been one of Latvia's notable business success stories. Founded in 2006 by Lotte Tisenkopfa-Iltnere, it quickly developed a distinctive presence with a brand that stressed its natural and Nordic character and was a hit in other countries, including France, the world's consmetics capital.
The Company's consolidated (unaudited) turnover in the first quarter of 2024 was EUR 5.5 million, a 5.2% increase compared to the same period in 2023.
Turnover in the first quarter of 2024 increased by 10% in European Union (EU) countries (excluding Latvia). Meanwhile, turnover in Latvia and outside the EU both declined by 8.5% year on year. France showed double digit growth for another quarter, with the France B2B segment growing by over 30%. In addition, Estonia saw a 37% growth in turnover in Q1 2024 compared to the same period last year.
In the first quarter 74% of turnover was generated in EU countries (excluding Latvia), 19% in Latvia, 6% outside the EU, and 1% from other revenue.
