E.l.f. Beauty has acquired buzzy skin-care brand Naturium for $355 million, another signal that the M&A market is rebounding.
E.l.f Beauty announced early Tuesday in a press release that the acquisition will double E.l.f. Beauty’s skin care business to 18% of retail sales. In the earnings report for its fiscal first quarter, released on August 1, E.l.f. Beauty showed 76% net sales growth year-over-year to $216.3 million. E.l.f Beauty’s other existing skin-care brand is E.l.f Skin, which the company carved out as its then-fourth portfolio brand in June 2022. That allowed E.l.f Skin to receive additional marketing investment, dedicated space on ElfCosmetics.com and increased social posts on skin care.
Naturium was founded in 2019 through incubator The Center, which also counts fragrance brand Phlur, body care brand Saltair and cosmetics brand Make Beauty in its portfolio. In Sept. 2022, Glossy reported that The Center will hit $100 million in retail sales this year. Ben Bennett, founder of The Center, confirmed that Naturium drove most of the company’s sales. E.l.f. Beauty expects Naturium to contribute approximately $48 million in net sales and approximately $9 million in adjusted EBITDA for fiscal year 2024. Naturium’s contribution is calculated based on half of E.l.f. Beauty’s fiscal year, as the expected timeline for the transaction to close is September 30, 2023.
“Naturium aligns with e.l.f. Beauty’s vision is to create a different kind of beauty company with brands built to disrupt norms, shape culture, and connect communities through positivity, inclusivity and accessibility,” said Tarang Amin, chairman and CEO of E.l.f. Beauty in a press release. “We have remained disciplined in pursuing strategic extensions that can leverage our strengths and bring complementary capabilities to e.l.f. Beauty. … Naturium reminds me of where e.l.f. was when I became CEO over nine years ago. Naturium demonstrates the same spirit, values, and growth characteristics we find in E.l.f.”
The acquisition of Naturium is one of several big moments for consumer brand M&A and public markets. Most recently, on August 25, grocery cart platform Instacart filed an IPO, the first notable venture-backed tech IPO since 2021. Before then, Il Makiage-owner Oddity positively debuted on the Nasdaq in July at $35 a share, above its initial $27-$30 range. Beverage brand Liquid Death is also planning an IPO in 2024. In April, L’Oréal Group acquired Aesop, and in June, Kering Beauté purchased fragrance brand Creed as the cornerstone of its luxury beauty portfolio. Other companies are looking at reassessing their portfolios, including Natura & Co, which owned Aesop and is exploring sales options for The Body Shop. Meanwhile, Amyris filed for bankruptcy in early August and plans to sell nine brands, including JVN Hair and Rose Inc. Suffice to say, plenty of other brands will be on the market.
Naturium has gained a strong footing in social media, with a product philosophy revolving around the benefits of plant-based products for the skin.
E.l.f. Beauty expects to finance the transaction using available cash on hand, borrowings under E.l.f. Beauty’s existing credit facility and approximately $70 million, or approximately 600,000 shares, of E.l.f. Beauty stock issued directly to founders and key management.
This story is developing.