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Dusk Group buys up Eroma to scale up operations across Australia

(Source: Bigstock)

Candle and aroma retailer Dusk Group has set out to acquire supplier Eroma in an effort to scale up both businesses operations in an attempt to increase the group’s addressable market.

The acquisition will cost the business $28 million, funded through a mix of $15 million in cash and a $13 million placement of shares in Dusk to all Eroma shareholders, and will see Eroma’s management team continue leading the business.

“This acquisition enlarges and diversifies our position in the home fragrance market [and] substantially increases the scale of our online operations,” said Dusk chief executive Peter King.

“This transaction affords us the opportunity to more fully vertically integrate our sourcing and distribution operations and gives us scope to share certain group resources to enhance performance for both businesses [and] will be highly EPS accretive from year one.”

According to the business, the transaction is expected to be completed by the end of January 2022.

With Eroma in tow, Dusk is seeking create a combined national network of distribution facilities, allowing for greater operational efficiencies in its distribution and create the opportunity for faster delivery times in some “remote” geographies.

Dusk Group has seen strong growth during the pandemic, as more and more Australians have been forced to stay in their homes corresponded to an uptick in candle sales.

The business has also been working on extending into new categories, launching online-only premium home décor brand Mihi Home earlier this year.

“Australians love scents and the powerful emotions conjured by them,” said founder Julia Utz.

“Still, we felt it was hard to find home fragrance and décor products that didn’t sacrifice a modern, statement and luxurious aesthetic worthy of sitting front-and-centre in any room of the home.”

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