L’Occitane Acquires Elemis for $900M, Eyes Asia Expansion
The purchase of the British premium beauty brand is L’Occitane’s largest since the group went public.
HONG KONG — Beauty group L'Occitane International SA has bought British premium skin care and wellness brand Elemis for $900 million, L'Occitane said Sunday evening, after successfully edging out other bidders in auction.
The acquisition in full of Elemis will be funded by the group's cash on hand and bank borrowings, and is expected to close in the first quarter.
With this deal, L'Occitane rounds out its portfolio, which consists of flagship brand L'Occitane en Provence; Melvita; Erborian; L'Occitane au Brésil, and LimeLife, and bolsters its focus on skin care. Meanwhile, Elemis is set to get a leg up to expand into new markets, particularly Asia-Pacific.
“This is L'Occitane's largest acquisition since listing [on the Hong Kong Stock Exchange] and a major step forward in building a group of premium beauty brands,” said Reinold Geiger, chairman and chief executive officer of L'Occitane, adding that Elemis had “enormous growth potential in untouched markets and channels, particularly in Asia-Pacific, where we have a strong presence.”
Harrington also said he hoped to realize a mission of growing Elemis “into one of the leading skin-care brands in the world.”
Founded in 1990, Elemis is a top seller in the U.K. that more recently has ramped up in the U.S, and had begun targeting Millennial shoppers with its Superfood line. Elemis' growth has come from the U.S. market with Ulta Beauty and the U.K., sources said, and the brand is available at Australian beauty retailer Mecca. A launch on Tmall is expected, sources added.
WWD reported in late November that Elemis parent L Catterton had set a Dec. 20 deadline for bids for the skin-care brand. L Catterton acquired Elemis and sister brand OneSpaWorld when it bought Steiner Leisure in 2015 for $925 million. In November, the PE firm sold OneWorldSpa to a special-purpose acquisition vehicle called Haymaker Acquisition Corp. Steiner Leisure was then left with Elemis, as well as Bliss and other spa lines.
Elemis had net sales and earnings before interest, taxes, depreciation and amortization for the year ended Dec. 31, 2018 were $140.2 million and $39.9 million, respectively, compared to the year before, which saw net sales of $110.6 million and EBITDA of $27.6 million. It is expected to have net sales in 2019 of $185 million with EBITDA of $55 million, according to industry sources.