Wellnex Life sells Pain Away for up to A$21.3 million in debt-clearing reset

Wellnex Life Limited has agreed to sell its Pain Away business and assets to Mentholatum Australasia for up to A$21.3 million in cash.

This is a major strategic reset rather than an ordinary portfolio tidy-up. Pain Away generated approximately A$13.38 million of revenue and A$4.36 million of EBITDA in the financial year ended 30 June 2025, making it an important contributor to the group.

If completed, the sale should allow Wellnex to repay all its borrowings and emerge debt free. The trade-off is that shareholders will be left with a smaller company focused on consumer healthcare, liquid soft gel analgesics and contract manufacturing.

The Pain Away deal at a glance

Key figure	Detail
Maximum consideration	A$21.3 million
Upfront price at completion	A$19.8 million
Potential earn-out	Up to A$1.5 million
Amount held in escrow	A$1 million
Borrowings to be repaid	Approximately A$10.2 million
Pain Away FY2025 revenue	Approximately A$13.38 million
Pain Away FY2025 EBITDA	Approximately A$4.36 million
Pain Away gross assets at 31 December 2025	A$22.76 million
Shareholder meeting	8 September 2026
Agreement sunset date	30 October 2026

The buyer, Mentholatum Australasia, is ultimately owned by Tokyo-listed Rohto Pharmaceutical. It will acquire Pain Away's intellectual property, inventory, goodwill and other assets used to operate the brand.

The full terms can be read in the original company announcement.

How much cash will Wellnex receive?

The headline consideration is up to A$21.3 million, but not all of that amount will be immediately available.

Wellnex is due to receive A$19.8 million at completion, subject to customary post-completion adjustments. Of that payment, A$1 million will initially be placed in escrow.

The escrow is divided into three parts:

• A$500,000 linked to post-completion adjustments.
• A$200,000 linked to stability testing of acquired raw materials, with release expected within 18 months, less any amount payable to the buyer.
• A$300,000 ringfenced against certain intellectual property and brand protection claims made within 12 months.

That means A$18.8 million of the upfront price would sit outside escrow before adjustments. After repaying approximately A$10.2 million of secured and unsecured borrowings, the simple arithmetic leaves A$8.6 million.

However, that is not a forecast of the final surplus. Transaction costs, post-completion adjustments and the amount needed to settle trade payables and other operating liabilities were not disclosed.

The additional A$1.5 million is an earn-out, meaning it is conditional consideration rather than guaranteed cash. Payment will depend on Pain Away achieving threshold and target normalised EBITDA performance during the 12 months following completion. The precise performance thresholds were not disclosed.

Why becoming debt free matters

The clearest benefit is the proposed removal of approximately A$10.2 million of borrowings, including interest.

This includes previously disclosed loans from former directors that had been due at the end of August 2026. Their repayment date has now been extended until completion of the transaction at no additional cost to Wellnex.

Clearing those obligations should strengthen the balance sheet and remove financing pressure. That is particularly relevant following the company's previously reported position that cash flow was positive but funding remained tight.

Management says the remaining funds could support working capital, settle operating liabilities, scale existing activities, fund disciplined growth or potentially be returned to shareholders.

The important word is "potentially". The board has not committed to a capital return, disclosed its possible size or explained which mechanism might be used. A decision will be made after completion.

Wellnex is giving up a meaningful contributor

The balance-sheet improvement comes at a real operational cost.

Pain Away contributed approximately A$4.36 million of unaudited EBITDA and A$13.38 million of unaudited revenue in FY2025. EBITDA is earnings before interest, tax, depreciation and amortisation, and is commonly used as a measure of operating performance.

Based on those figures, the A$19.8 million upfront price represents approximately 4.5 times Pain Away's FY2025 EBITDA. The maximum A$21.3 million consideration represents approximately 4.9 times that EBITDA.

Those simple multiples provide context, but they do not establish whether the price is attractive on their own. The announcement does not disclose Pain Away's latest trading, expected growth, cash conversion or standalone costs.

Pain Away also had unaudited gross assets of A$22.76 million at 31 December 2025. Gross assets are not the same as net asset value, so comparing that figure directly with the purchase price could be misleading.

What remains after the disposal?

Following completion, Wellnex will retain its liquid soft gel analgesics operation, supported by its own Therapeutic Goods Administration marketing authorisations, alongside its contract manufacturing activities.

The board describes contract manufacturing as a capital-light business with growing international reach. Its stated goal is to scale the remaining company towards sustainable profitability and positive free cash flow by adding products and entering further markets through existing global partnerships.

Wellnex may also invest in or acquire established consumer retail brands with proven distribution and attractive margins.

That offers a possible route back to growth, but investors do not yet have enough information to judge the financial shape of the remaining group. Revenue, EBITDA, cash flow and margins for the continuing operations were not disclosed in this announcement.

There is also a five-year restriction preventing Wellnex and the other sellers from competing with Pain Away in Australia and New Zealand or soliciting its customers, staff, contractors and suppliers.

Shareholders still need to approve the sale

The transaction is binding but not unconditional.

Because Pain Away is large relative to Wellnex, shareholder approval is required under AIM Rule 15. An extraordinary general meeting is scheduled for Tuesday, 8 September 2026.

The Australian Securities Exchange has provided in-principle advice that approval should not be needed under rules relating to a significant change in the nature or scale of the business or disposal of the main undertaking. However, the company must still obtain all necessary AIM and ASX approvals.

Completion is targeted shortly after shareholders approve the deal and the remaining conditions are satisfied. If the conditions are not satisfied or waived by 30 October 2026, either side may terminate the agreement unless they agree otherwise.

The key question is what Wellnex builds next

For shareholders, this proposal exchanges a proven flagship asset for a cleaner balance sheet and greater financial flexibility.

Repaying all borrowings is a substantial positive, while the upfront cash element gives the transaction more certainty than a funding-led expansion plan might have offered. Nevertheless, A$1 million will initially be held in escrow, the A$1.5 million earn-out is conditional and the deal still requires approval.

The next test will be whether the retained operations can replace the earnings contribution being sold. Investors should watch for details of the remaining group's financial performance, the final net cash position, the board's capital allocation plan and whether any shareholder distribution is ultimately proposed.