E.l.f. Beauty to Acquire Skincare Brand Naturium for $355 Million

On August 29, E.l.f. Beauty announced that it has entered into a definitive agreement to acquire Naturium for $355 million in cash and stock.
The acquisition is expected to double E.l.f. Beauty’s skin care presence to approximately 18% of retail sales, according to a company press release. The transaction is anticipated to close on or about September 30, subject to the closing conditions of the transaction.

Naturium was founded in 2019 by The Center, a beauty brand accelerator that includes Saltair and Phlur, and the following year, influencer Susan Yara joined the team. The brand is known as a “high-performance” skincare brand, with the Vitamin C Complex Serum being a particular best-seller. The brand has gained significant popularity in just four years since its inception, in part due to the affordability of its skincare products, which are priced at an average of $18, with a focus on ingredients and product efficacy.

In a statement, Yara said, “We’ve built an incredible brand, with numerous superstar formulas, a dedicated community and a world class team in less than four years.”

Naturium is expected to achieve $90 million in sales and $17 million in adjusted earnings before interest, taxes, depreciation, and amortization in 2023. Given that the transaction is completed in the middle of the accounting period, it is expected to contribute approximately $48 million to E.l.f. Beauty in 2024. After the acquisition, the brand will continue to operate and maintain its team at its Los Angeles headquarters.

E.l.f., meanwhile, is a brand that began selling skincare products in 2015. The company acquired clean beauty brand W3ll People in a $27 million cash deal before the 2020 pandemic, and that same year launched its first in-house brand, Keys Soulcare, with singer Alicia Keys. In 2022, the company launched a fourth portfolio brand called E.l.f. Skin, strengthening its presence as a multi-beauty brand company.

E.l.f.’s average price range is around $9, making it more reasonably priced than Naturium. In addition, E.l.f.’s main customers are price-conscious Gen Z, while Naturium’s customer base is millennials, and 40% of its customers are said to be male.

“With our complementary missions and cultures, I know E.l.f. Beauty will be the ideal partner as we expand our reach, and continue to make high performance skin care accessible for all,” Yara commented.

E.l.f. Beauty is also looking to expand Naturium’s retail presence in the future, according to Tarang Amin, CEO of E.l.f. Beauty. Currently, Naturium products are only sold directly on the company’s website and through the Target and Amazon marketplaces. However, just as E.l.f. has been widely expanding its distribution, Naturium’s brand awareness will be further enhanced if it is able to develop other sales channels.

Tarang  noted that the short-term goal is to maximize where Naturam is already located, while at the same time, she said, “Certainly given the momentum that Naturium has, there are going to be other distribution opportunities for Naturium that we’ll look into,” “We feel there are opportunities not only in the U.S., but also internationally.”

Earlier this month, E.l.f. reported its 18th consecutive quarter of sales growth, reporting in August that first-quarter sales rose 76% to $216.3 million from the same period last year, a strong start to the new fiscal year. Net income jumped 266% to nearly $53 million. E.l.f. Beauty revised its outlook upward for fiscal 2024, forecasting sales of $792 million to $802 million.

With this acquisition, E.l.f. is steadily moving closer to the possibility of becoming the next beauty conglomerate.

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