Neptune Wellness Solutions (TSX: NEPT) (NASDAQ: NEPT) has found itself in a partnership with a large, undisclosed consumer goods company. Indicated as being “one of the world’s leading” CPG brands, the partnership is focused on import and stock distribution. Potential income from the transaction is said to be as much as US$65 million through to US$137 million, which is expected to occur over the next 18 months.
The partnership appears however to consist of Neptune distributing the CPG firm’s products, rather than the other way around. The company expects to receive the first shipment of products into inventory by the end of October, with product segments said to be largely focused on professional beauty, personal care, and hygiene. The CPG firm is under no obligation to accept orders made by Neptune under the agreement, and no minimum purchase commitments are in place.
Further, the announcing news release states explicity, “there is no certainty at this time that the full deal size will be realized.”
Neptune will serve as the US and Canadian master distributor for the CPG firm’s products, which notably includes hand cleaning wipes and hand sanitizer products, which are to be distributed across commercial, industrial and institutional channels. It appears that the strategy behind this is that Neptune will use the CPG products as a means of getting in the door at retailers, following which it will attempt to distribute its own products as well.
Further details in terms of expected margins or contract length were not provided.
Neptune Wellness last traded at $2.40 on the Nasdaq.
Information for this analysis was found via Sedar and Neptune Wellness Solutions Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.