Alliance Pharma to buy rights to lice treatment range Vamousse

Specialty pharmaceutical group Alliance Pharma has agreed to buy the worldwide rights to pesticide-free lice treatment range Vamousse from TyraTech Inc for an initial consideration of $13m and a deferred contingent of up to $4.5m.

Net sales of Vamousse by TyraTech for the year to the end of December 2016 came in at $6.6m, with gross profit of $4.6m. Alliance said it plans to make use of its EU affiliates and "extensive distribution network" to drive further growth in the brand, whose market share has grown "significantly ahead" of its category in the US, where it derives around 83% of its revenue.

In addition to the Vamousse rights, Alliance will be acquiring inventory with an expected value of approximately $800,000.

Chief executive officer John Dawson said: "We are delighted to acquire the innovative consumer healthcare brand Vamousse, which will become our third major international growth brand. The acquisition will be immediately earnings enhancing and expected to be accretive to our return on invested capital from the second year.

"Vamousse will leverage our current infrastructure as it fits well into our growing UK consumer business, whilst expanding our footprint into the US. The brand will also benefit from added distribution both through our EU affiliates and through our international partner network operating in over 90 territories worldwide."

The initial consideration will be funded from existing cash and bank facilities, including a drawdown from the group's £35m revolving credit facility. Around £1.3m of the RCF will remain undrawn on completion of the acquisition of Vamousse.

At 1150 GMT, Alliance shares were up 5.5% at 61.97p.