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(NASDAQ: DSKX) – Research Report
Company Name: DS Healthcare Group Inc.
Stock Symbol: DSKX Company Website: www.dslaboratories.com
Trading at $1.77 Per Share (02/01/2016)
Currently DSKX has a very attractive valuation with high analyst ratings, hedge fund interest, strengthened management team and major upcoming catalyst. DSKX is trading at a 39M market cap while they’re finalizing the WP Group acquisition which is expected to increase the company’s annual revenues to approximately $65 million and $10 million in EBITDA with the combined businesses from over 20 countries, 900 unique and diversified products, and a broad range of personal care categories. This acquisition fiercely scales up and expands DS Healthcare’s business operations, product portfolio and distribution network in one deal. With the deal in place, DSKX is trading well below 1x expected annual sales while in the recent years many of its competitors in the industry sold at approximately 5x sales. Nioxin, Chattem, Simple Health & Beauty just to name a few.
Several weeks ago, Frigate Ventures LP filed a SC 13G. In the filing, it appears Frigate Ventures LP owns 1,500,000 shares of DSKX. This shows Frigate Ventures Lp’s confidence and optimism in the future of the company and as a institutional investor with an excellent track record, its safe to assume they do their homework before buying a 7.1% stake in a company.
HC Wainwright initiated coverage on DS Healthcare Group (NASDAQ: DSKX) with Buy rating and a $6.00 price target for the company in a report on October 1st 2015. (Source) www.benzinga.com/stock/dskx/ratings &
Back in August 27th 2015, DSKX entered into a definitive acquisition agreement to acquire 100% of the assets and businesses of the WR Group. In fiscal 2014, WR Group generated revenues of approximately $50 million and adjusted earnings before interest expense, income taxes, depreciation and amortization (EBITDA) of approximately $10 million. WR Group owns an extensive portfolio of personal care brands and operates one of the world’s largest and fastest growing international e-commerce personal care and wellness websites with over 2 million active customers. Some of the WP Group’s brands and websites include Biovea, Baby Labs, Oralgen, Zoeez, Ancgen, Enraged just to name few. DS Healthcare intends to fund the acquisition primarily with non-dilutive senior debt.
On October 16th, DSKX announced that they executed a term sheet with a middle market lender which will provide the Company with $35 million in senior debt financing. Later on December 18th, the company announced a $5 Million registered direct offering to finalize senior debt requirements so basically at this point this I encourage all of you to do your research right now before the acquisition takes place while the stock is trading at its lows. The acquisition may result in DSKX and its WR Group subsidiaries becoming one of the world’s largest publicly traded online personal care distribution companies .
Full Details of the acquisition can be found using this link: (Source)
Strengthened Management Team:
-Manny Gonzalez, a former top Procter & Gamble executive managing a team of 7,000 sales representatives in the U.S., who has direct access to every major retailer in the country recently joined DS Healthcare as its Chief Commercial Officer.
-Renee Barch-Niles, an experienced CPG Executive who drove double-digit year-over-year growth in global food, drug, mass, club and specialty channels for Global companies such as Daymon Worldwide and Emilia Personal Care now serving as DS Healthcare Chief Executive Officer.
-Mark Brockelman also joined DS Healthcare Group to help scale up the company with his experience in mergers and acquisition , systems integration expertise and highly astute financial acumen. Mr. Brockelman Brockelman served as the Chief Financial Officer for National Dentex Corporation as well as the Senior Vice President/Chief Financial and Administrative Officer of the Miami Dolphins.
Recent Corporate Developments & Company News:
Jan 6, 2016 – Miami Dolphins CFO, Mark Brockelman Joins DS Healthcare
Dec 18, 2015 – DS Healthcare Announces $5 Million Registered Direct Offering to Finalize Senior Debt Requirements
Dec 10, 2015 – Rapid Expansion in Nutricosmetic Products Market Fuels Increased Sales Opportunities & High Margin Growth Potential Led by New Product Launches & Large Retail Store Distribution Partnerships
Dec. 9, 2015 – DS Healthcare Launches in Walmart Brazil
Nov 24, 2015 – Dr. Antonella Tosti, MD joins DS Healthcare team
Nov 17, 2015 – DS Healthcare Third Quarter Revenues Grow 11% and Fifth Consecutive Quarter of EBITDAS Profitability
Oct. 26, 2015 – DS Healthcare Names Renee Barch-Niles Chief Executive Officer
Oct 16, 2015 – DS Healthcare Provides Update on WR Group Acquisition
Aug 17, 2015 – DS Healthcare Enters Into Definitive Agreement to Acquire WR Group
Aug 14, 2015 – Former (NYSE: PG) Vice President of Sales Joins DS Healthcare
July 20 2015 – DS Healthcare Launches Spectral.Lash In Brazil’s Most Upscale Pharmacy Chain Drogaria Iguatemi
About DS Healthcare Group
DS Healthcare Group Inc. develops novel biotechnology for topical therapies. It markets through online channels, specialty retailers, distributors, pharmacies, and salons. Its research has led to a highly innovative portfolio of personal care products such as Revita, Radia, Dandrene, Spectral and additional innovations in pharmaceutical projects. For more information on DS Healthcare Group’s flagship brand, visit www.dslaboratories.com
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