DD3 Acquisition has signed a definitive agreement to merge with Betterware, a direct seller of home organisation products in Mexico.
To operate as Betterware, the merged company is set to remain publicly listed on Nasdaq.
The initial enterprise value is approximately $367m, which is equal to a multiple of 8.6 times Betterware’s estimated 2019 EBITDA.
Under the agreement, the current Betterware shareholders will hold the majority ownership of the merged entity, with an estimated 80% stake at transaction closing. The remaining stake will be held by public investors and DD3.
Betterware chair Luis Campos and CEO Andres Campos will operate the combined company while DD3 CEO and chair Martin Werner and board member Guillermo Ortiz are expected to join the merged company’s board of directors.
Campos said: “We are very excited about becoming a public company to support our continued expansion and boost our growth opportunities.
“This transaction represents the next chapter of our journey to become the leading consumer company in Mexico and Latin America focused on the home solution and organisational segment.”
With approval due from DD3’s shareholders and other customary closing conditions the transaction is anticipated to close in the fourth quarter of this year.
The merged entity will use the transaction proceeds for future growth, maintain financial flexibility and other purposes.
Werner said: “We found the perfect fit with Betterware, a leading consumer sector company with a proven track record and tremendous growth opportunities.
“I look forward to working with Luis and his dynamic team to help them thrive as a public company while they continue implementing fast growing initiatives.”