ELC will expand its investment in the company
behind fast-growing skin care brands The Ordinary and NIOD, and
establish terms for full ownership in three years
The Estée Lauder Companies Inc. (NYSE: EL) announced today that
it has entered into an agreement to increase its investment in the
Canadian-based, vertically integrated, multi-brand company, DECIEM
Beauty Group Inc. (“DECIEM”) from approximately 29% to
approximately 76% (the “First Phase”). The transaction is expected
to close in the quarter ending June 30, 2021. The Estée Lauder
Companies Inc. (“ELC”) has agreed to purchase the remaining
interests after a three-year period (the “Second Phase”).
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20210223005352/en/
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Known as “The Abnormal Beauty Company”, DECIEM is an industry
disruptor with a consumer-focused approach. It was founded in 2013
by the late Brandon Truaxe, a visionary who set out to change the
beauty industry through authenticity and transparency. He developed
the company with creativity and innovation alongside Founder,
Pasquale Cusano and Co-Founder, Nicola Kilner. Nicola now leads
DECIEM as CEO, working closely with Prudvi Kaka, Chief Scientific
Officer, whose in-house team of biochemists lead innovation across
DECIEM’s brands, and Stephen Kaplan, Chief Operating Officer.
“Over the last four years, we have built a truly special
long-term partnership with the incredible DECIEM team, and we are
excited for what the future holds,” said Fabrizio Freda, President
and Chief Executive Officer of The Estée Lauder Companies Inc.
“DECIEM is an exceptional company. Nicola and her team have built
and cultivated authentic brands with highly effective, must-have
products using a vertically integrated model, and have fostered a
uniquely transparent and engaging communication style. The
company’s hero products, desirable innovation, and digital- and
consumer-first high-touch approach have been instrumental to its
success.”
“Brandon dreamed of ELC being the forever home for DECIEM, and
we are truly humbled to achieve his vision today,” said Nicola
Kilner. “Prudvi, Stephen, our team and I will continue to build on
Brandon's creation, and we thank ELC for their continued commitment
to our vision and future."
Since ELC’s initial investment in June 2017, DECIEM has grown
rapidly, achieving net sales for the 12 months ended January 31,
2021, of approximately USD $460 million. The amount to be paid by
ELC at closing is approximately USD $1.0 billion, reflecting a
total enterprise value of approximately USD $2.2 billion for the
First Phase. Upon closing the First Phase, ELC expects to have a
non-cash gain on its initial investment. Excluding this gain,
DECIEM’s net sales and earnings are expected to have a negligible
impact on ELC’s fiscal year 2021 consolidated results. The
acquisition is subject to certain conditions, including regulatory
approvals and is expected to close in the quarter ending June 30,
2021. These U.S. dollar amounts were translated at average exchange
rates for net sales and current exchange rates for transaction
values. The purchase price for the remaining interest in the Second
Phase will be determined based on the future performance of
DECIEM.
DECIEM’s portfolio currently encompasses six brands, including
The Ordinary, an internationally popular skin care brand with
impressive community- and referral-driven buzz reflecting a deep
connection with its global consumer base of skin care devotees.
DECIEM’s range of “functional beauty” brands and products are sold
primarily through DECIEM-owned and retailer e-commerce sites and
specialty-multi stores, as well as its own freestanding stores,
primarily in the United States, United Kingdom and Canada.
In this transaction, Perella Weinberg Partners served as
financial advisor to The Estée Lauder Companies Inc., while
Lowenstein Sandler LLP and Osler, Hoskin & Harcourt LLP served
as legal counsel. The other owners of DECIEM received financial
advice from Baylor Klein Limited, Fasken Martineau DuMoulin LLP
acted as joint counsel for the selling shareholders, while each of
Farris LLP and Gowling WLG (Canada) LLP acted as independent
counsel, in each case, for one of the selling shareholders. Blake,
Cassels & Graydon LLP acted as corporate counsel for DECIEM
Beauty Group Inc.
Gowling WLG (Canada) LLP acted as counsel in representing
DECIEM’s operational interests.
The forward-looking statements in this press release, including
those in the quoted remarks and those relating to the expected
closing date, expectations for the acquired company and the
benefits of the acquisition, involve risks and uncertainties.
Factors that could cause actual results to differ materially from
those forward-looking statements include the ability of the parties
to satisfy the closing conditions under the definitive purchase
agreement, current economic and other conditions in the global
marketplace, actions by retailers, suppliers and consumers,
competition, ELC’s ability to work with the continuing management
and other investors in DECIEM and successfully integrate the
acquired business and/or implement its long-term strategic plan,
and those risk factors described in ELC’s annual report on Form
10-K for the year ended June 30, 2020.
The Estée Lauder Companies Inc. is one of the world’s
leading manufacturers and marketers of quality skin care, makeup,
fragrance and hair care products. The company’s products are sold
in approximately 150 countries and territories under brand names
including: Estée Lauder, Aramis, Clinique, Lab Series, Origins,
Tommy Hilfiger, M·A·C, La Mer, Bobbi Brown, Donna Karan New York,
DKNY, Aveda, Jo Malone London, Bumble and bumble, Michael Kors,
Darphin, TOM FORD BEAUTY, Smashbox, Ermenegildo Zegna, AERIN, RODIN
olio lusso, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW,
KILIAN PARIS, BECCA, Too Faced and Dr. Jart+.
ELC-C ELC-F
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version on businesswire.com: https://www.businesswire.com/news/home/20210223005352/en/
Media Relations: Jill Marvin
jimarvin@estee.com
Investor Relations: Rainey Mancini
rmancini@estee.com
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