Charles Sternberg, Assistant Editor02.23.21
The Estée Lauder Companies Inc. has entered into an agreement to increase its investment in the Canadian-based, vertically integrated, multi-brand company, Deciem Beauty Group Inc. from approximately 29% to approximately 76%.
The transaction is expected to close in the quarter ending June 30, 2021. The Estée Lauder Companies Inc. has agreed to purchase the remaining interests after a three-year period.
About Deciem
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. He developed the company 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.
Deciem’s portfolio currently encompasses six brands, including The Ordinary, a popular skin care brand with community- and referral-driven buzz reflecting a 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.
“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,” commented 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."
More About the Investment
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. The purchase price for the remaining interests in the Second Phase will be determined based on the future performance of Deciem.
The transaction is expected to close in the quarter ending June 30, 2021. The Estée Lauder Companies Inc. has agreed to purchase the remaining interests after a three-year period.
About Deciem
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. He developed the company 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.
Deciem’s portfolio currently encompasses six brands, including The Ordinary, a popular skin care brand with community- and referral-driven buzz reflecting a 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.
“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,” commented 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."
More About the Investment
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. The purchase price for the remaining interests in the Second Phase will be determined based on the future performance of Deciem.
