Health products distributor, producer and retail franchise Healthzone is now close to a $5 million sale, after being placed into receivership last year.
The business was placed in receivership last November, with PPB and HLB Mann Judd appointed, despite finalising a capital raising worth nearly $10 million in the previous month.
Healthzone has reportedly been attempting to get franchisees on board for a $5 million sale to Singapore health group Eu Yan Sang. It is understood the deal would only proceed if a majority of its 80 franchisees agreed to remain with the company post-sale.
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Healthzone general manager of retail Garth Parker told SmartCompany this morning the deal was expected to be finalised today, and that getting the backing of franchisees was “pretty easy”.
SmartCompany contacted several franchisees this morning, but many refused to comment on the current sale.
The Australian Financial Review reported yesterday how shareholders and creditors are questioning how the company with a market cap of $30 million is being sold for only $5 million.
The business operates more than 110 stores with 250 employees. At the time the company entered receivership, the receivers said it would work with everyone involved to ensure the business continued operating.
Healthzone remains profitable, with a profit of $2.9 million after tax with revenue of $90 million last year, but that had fallen from 2010 when profit was $4.3 million.
The business began to struggle as it switched to high-margin products, prompting a restructure of the entire business. Profits had risen, but top line revenues had fallen during that transitional period.