Estée Lauder Increase Ownership in DECIEM

by | Feb 23, 2021

Estée Lauder Companies 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.

Estée Lauder Companies Inc. 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 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.

 

“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.”

 

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.

 

“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. 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, mainly in the United States, United Kingdom and Canada.

 

Source: ELC

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