Hotel Chocolat has bought a beauty product business for less than the price of a box of chocolates.
The confectioner said it paid £4 for Rabot 1745, a five-year-old company which last year lost around £400,000. The cheapest box of chocolates on Hotel Chocolat’s website is £5.
The chocolate maker already owned nearly half of the shares in Rabot – it helped set up the business in 2016 alongside its chairman, Andrew Gerrie.
The idea was to create a range of beauty products inspired by the company’s cacao farm in Saint Lucia.
Mr Gerrie will receive around £3 for his 40% stake in the business, with the rest of the investors sharing about £1 between them.
However, the chairman can expect much more out of the deal.
After it buys his stake, Hotel Chocolat will pay off the loan that Mr Gerrie provided to Rabot.
The more than £744,000 will be paid off with some 200,000 shares in Hotel Chocolat, increasing his stake by around 40%.
The company said it is well placed to leverage the value of Rabot’s inventory and develop its beauty products.
Wayne Brown, an analyst at Liberum, said: “The move to full ownership will: (i) allow the group to continue to develop its successful, award-winning beauty range, which is particularly popular across its UK channels, St Lucia and Japan; (ii) support an ongoing brand-enhancing, point of differentiation versus other chocolate players; and (iii) allow the integration of operations to bring synergies that should see Rabot begin to turn a profit versus the current slight loss.”