In an interview with Proactive’s Andrew Scott, Pental Ltd (ASX:PTL) CEO Charlie McLeish has confirmed the divestment of its consumer products division while bolstering its focus on a burgeoning e-commerce operation.
"The board believed that the proposed transaction represented an offer from a global counterparty and an attractive price that provides a bright future for the longevity of our brands," McLeish said.
The deal involves the sale of the consumer products business and the Shepperton manufacturing facility to Selleys, a division of the Dulux Group for $60 million on a debt and cash-free basis.
Pental, known for its flagship brands such as White King in Australia, aims to reorient its business model.
Post-divestment, the company will operate as a standalone e-commerce business.
Bolsters e-commerce
McLeish revealed that the company has recently initiated a new gifting business, SmileShip, and is proactively exploring expansion avenues in the online sales channel.
In terms of economic pressures on their seasonal business, Hampers with Bite, McLeish said they're "focused more on business-to-business (B2B), which gives us blue-chip clients who are loyal and come back year on year."
The company also has plans to engage in mergers and acquisitions to complement its existing B2B client base.
Financial health
Regarding the financial health of Pental, McLeish stated: "We will be debt-free… we will have a very, very healthy balance sheet, well above 10 million US dollars."
The decision to divest comes at a time when the e-commerce market presents significant growth opportunities, making Pental’s strategic refocusing a topic of considerable interest.