With Revenue Climbing, What’s Next for Relevium Technologies?

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Monday, October 23, 2017

Back in June, Relevium Technologies (TSX-Venture:RLV) completed its acquisition of the assets of privately-owned BioGanix Ltd., snagging the nutraceutical brand for US$4.45 million, or only 3.7-times earnings before interest and taxes (EBIT).  Bringing in BioGanix’s website properties, formulations, inventory and product pipeline has had an immediate impact on Relevium’s balance sheet, generating about C$700,000 in revenue in the first 50 days of bringing the assets under their umbrella.  That was an improvement of approximately 53 percent from the same period a year earlier, or 47 percent when factoring in forex fluctuations.

Relevium management has made it clear that they are employing a diverse model of organic and inorganic growth, stating that ideally the company will make a new acquisition about every six months.  The company has further said that they have a pipeline of potential acquisition targets within their parameters of $2.0 million to $20.0 million in annual sales that they believe can be acquired at favorable terms of roughly 4x earnings before interest and taxes (EBIT).

Relevium wants acquisition targets that already have a strong online sales presence or an e-commerce position that can be optimized to increase sales.  In the case of BioGanix, about C$4.5 million of its C$5.0 million in trailing-twelve-month revenue and C$1.3 in trailing-twelve-month cash flow was generate from sales on Amazon.com.

While holding a lofty goal for its rate of mergers, there’s little denying that the first acquisition paid off immediately.  To that point, it doesn’t take a horologist to recognize that it has been just over four months since the completion of the BioGanix acquisition, which should put investors’ ears to the ground listening for the possibility of another move by Relevium as it looks to capture share in the $3.7 trillion global health and wellness market.

As it maximizes efficiencies with the integration of BioGanix into Relevium and looks for other deals, the company continues to work on its organic growth strategies as well.  This includes launching its maiden technology built to address growth opportunities in areas of dynamic pricing, new products, logistics and supply chain management.  In its initial effort, Relevium has engaged the strategic data services consulting firms for the purposes of building technology to optimize the product development cycle by leveraging big data and artificial intelligence (AI). 

Essentially, what Relevium aims to do is to take human interpretation of data out of the equation to decide what people want, an “action speaks louder than words” mentality.  The company believes it can develop technology to best determine what products are in demand and where to launch them ahead of consumer trends taking place.

Elsewhere, Relevium partnered with Montreal-based pet and livestock nutrition company Salvenia Nutrition and Biodevas Labs, a France-based maker of veterinary phytoceutical products, to develop an exclusive brand and product line of nutraceuticals and phytoceuticals targeted to pet owners on a direct to consumer basis.  Phytoceuticals are plant-derived chemicals believed to have beneficial health effects, although not considered an essential nutrient.  Product and market development initiatives are slated to be underway this month, with a product launch targeted for Spring 2018.  A recent TechNavio market research report estimates the nutritional supplement market for pets to be more than $1.6 billion in North America alone.

Relevium is a company that doesn’t stand still as it aggressively looks to build a portfolio of brands specializing in e-commerce sales targeting the lucrative – and highly fragmented – health and wellness markets, albeit for people or animals.  Now it’s a matter of seeing if the company can keep up its torrent pace of activity and if execution of the model begins to translate to appreciation of the company on Wall Street.

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