Background

Founded in 2013, EOS Leisure Group (EOS) built its reputation through its online offering of the Vapemate brand of customisable vaping e-liquids, as well as selling e-liquids wholesale and providing manufacturing and laboratory services in the UK and Europe. Following successful growth, EOS diversified and developed the award-winning Ambience range of CBD-infused cosmetics products, and the Hatter’s Hemp Tea brand. The new products were listed by major retailers including Boots and Holland & Barrett; but after significant investment in developing the ranges, the COVID-19 pandemic coincided with the major retail launches of these products. The series of lockdowns in the UK significantly limited sales in physical stores, which in turn had a substantial impact on cashflows for EOS.

Action

FRP’s Corporate Finance team was initially engaged to explore the potential sale of Vapemate, to realise the value and allow the management to focus on growing the CBD division. However, with the impact of the lockdown in England due to COVID-19 causing further cashflow restrictions, the deal strategy switched to the sale of the whole business through an accelerated M&A process. Partners from our Restructuring Advisory team were appointed as Joint Administrators to facilitate the transaction.

Outcome

Despite the initial marketing of the opportunity taking place during the Christmas holidays, and the entire sale being conducted within a strict COVID-19 lockdown, FRP’s sale process attracted high levels of interest. After competitive bidding, the business and its assets were sold to Bolton-based AquaVape via a pre-packaged sale from administration. We were able to complete the deal just over a month after the initial marketing, safeguarding 21 jobs and securing the future of the business.