Investors placed bets on shares of Nu Skin Enterprises Inc. (NYSE:NUS) at pre-market trading to buoy its prices by nearly 17 percent following news that it raised $250 million from the sale of its affiliate marketing technology platform.
Stock market data on a laptop screen. Photo by Alesia Kozik
On Friday, Nu Skin (NUS), through its subsidiary Rhyz Inc. said it completed the sale of the Mavely affiliate marketing platform to Later, a company backed by Summit Partners for $250 million. The deal included both cash and a minor equity stake in the company.
Proceeds from the transaction are expected to be used to pay down debt and fund additional innovation.
According to data from InvestingPro, the transaction value represents 75 percent of Nu Skin’s (NUS) current market capitalization of $326.1 million, with analysis indicating that the stock is currently undervalued.
Mavely is set to merge with Later following the transaction. Approximately $33 million will be paid to other equity holders in the Mavely business.
The transaction is expected to provide Nu Skin (NUS) with enhanced capabilities as it continues to develop a beauty, wellness, and lifestyle ecosystem.
“Together, we believe Later and Mavely will provide enhanced capabilities to our company as we pursue our broader beauty, wellness, and lifestyle ecosystem vision, while the transaction generates additional capital and resources for us to increase innovation in our core Nu Skin business and investment in our Rhyz companies,” Nu Skin (NUS) President and Chief Executive Officer Ryan Napierski said.
“This underscores the value of Rhyz to incubate and scale meaningful businesses with synergistic value across the enterprise,” he added.
The transaction was said to have generated an approximate five times return on Nu Skin’s (NUS) cumulative investment in Mavely since acquiring the latter in 2021.
The company also plans to use its strengthened balance sheet to buy back stock under its existing stock repurchase program, providing value to its shareholders.
Nu Skin (NUS) is an integrated beauty and wellness company that operates in nearly 50 markets worldwide. It boasts of brands including Nu Skin personal care, Pharmanex nutrition, and ageLOC anti-aging.
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Disclosure: None. This article is originally published at Insider Monkey.