The sale details of high-profile Albany sandalwood oil and cosmetics company Mt Romance Australia Pty Ltd have emerged after weeks of legal process around the settlement – with an Australian company committing an estimated $20 million for the purchase.
The sale details of high-profile Albany sandalwood oil and cosmetics company Mt Romance Australia Pty Ltd have emerged after weeks of legal process around the settlement – with an Australian company committing an estimated $20 million for the purchase.
Melbourne-based Holistic Products Group Pty Ltd, a leading essential oils company trading as In Essence Aromatherapy, was the successful bidder in an exhaustive, six-month trade sale.
The move takes Holistic, which wholesales a number of brands in the complementary health sector, downstream into essential oil production for the first time.
Holistic director Richard Young said the company planned to retain Mt Romance’s Albany production and tourism facility.
Mt Romance founder Steve Birkbeck said the sale’s timeframe had been agreed in 1999 when venture capital firm Foundation Capital had come on board as a major shareholder with 30 per cent equity.
However Mr Birkbeck said the timing had been appropriate, with Mt Romance having cracked the world’s luxury perfume market and supplying leading perfume brands, and some new ones such as Adidas, with its sandalwood oils.
“We have gone as far as we can in that sector,” he said. “Where we have not been able to penetrate has been in the complementary health business.”
Mr Birkbeck said the move to sell the business had started last December when, with the aid of KPMG’s Perth mergers and acquisitions team led by Peter Dawson, a list of 20 potential buyers had been drawn up and sent information memorandums.
The view had been that the best way to realise its value was a 100 per cent sale.
“Being a minor shareholder was not 100 per cent desirable from my point of view,” said Mr Birkbeck, who has already moved beyond Mr Romance with the addition of a director’s role at listed Indonesian pearl group Atlas Pacific Ltd.
According to a recent search of Australian Securities and Investments Commission records, Mt Romance’s register has been dominated by Foundation Capital, interests associated with Mr Birkbeck, and a company owned by Guy and Marie Leath.
Mr Birkbeck said the bidding finally came down to Holistic and an unnamed French company.
Mr Young said Holistic had long been interested in the production of essential oils and saw the acquisition of Mt Romance as sound way to move into that area.
The tourism aspect of the Western Australian company also complements the lifestyle health products Holistic markets, including the growing spa sector in Australia and elsewhere.
Holistic would not confirm the price tag but sources estimated it was approaching the $20 million mark for the Great Southern company, which processes 550 tonnes of sandalwood a year, about a quarter of the state’s total harvest.
Mr Young said the company was also attracted to strong research and development work undertaken by Mt Romance into the properties of native Australian plants.
“There is a bank of plants natural to Australia which we have not scratched the surface of yet,” he said.
Mt Romance is the recipient of a federal START grant to fund research into new ingredients from native plants.
“We saw some quite interesting pharmaceutical properties in the wood, I think there are some big opportunities there,” Mr Birkbeck said.
He believes the emerging plantation industry, which is also strong around Albany, might have commercial opportunities from the research.
