L’Oréal is buying Thayers Natural Remedies, a founder-run skincare company, after prevailing over sponsors in a process that persisted through the crisis.
The deal is valued at nearly $400 million, PE Hub has learned. The Paris-headquartered beauty conglomerate announced the deal late Thursday, but financial terms were not disclosed.
Thayers expects to produce more than $50 million and $20 million in 2020 revenue and EBITDA, respectively, sources said. The sources pointed to data from IRI, a market-intelligence and data company, which places Thayers’ recent year-over-year revenue growth in 50 percent to 60 percent range.
These figures imply a more than 7x to 8x revenue multiple and north of 15x EBITDA multiple, a source said.
Founded in 1847 by Doctor Henry Thayer, the skincare brand is best known for its witch hazel products that treat blemishes and acne. Thayers’ branded products include toners and astringents, among other things.
L’Oreal said the new brand would be integrated into its consumer products division.
The transaction concludes a sale process that kicked off early this year via Whipstitch Capital, an independent M&A advisory focused on the healthy living and consumer market, sources said. Lazard advised L’Oreal on the transaction, they said.
Approximately eight final bids were submitted about three weeks ago from a group of sponsors, PE-backed sponsors and strategics, the people said.
The process was nearly called off in March as the covid-19 crisis deepened. Most auctions in their early phases were indefinitely postponed at the time after the pandemic fueled market volatility, PE Hub reported.
Despite the world going remote, private equity and strategic interest in Thayers persisted, and the process moved forward on a virtual basis, sources said.
The fact that L’Oreal came out on top was even more intriguing. With headquarters in Paris, the international angle added another layer of complexity, said a source.
Thayers is largely “recession friendly,” one source said, as the company’s products are at lower price points versus prestige skincare and makeup brands. On average, Thayers’ products sell for $9 per unit, according to SPINS, a wellness-focused data technology company.
Thayers’ biggest retail partner is Target, and although it has a large presence, the company has significant head room to expand distribution, the person added.
In recent branded consumer activity, Nestlé Health Science earlier this month snapped up a majority stake in Vital Proteins, a collagen brand.
Also this month, a special-purpose acquisition company formed by partners from CC Capital agreed to merge with Utz Quality Foods. Collier Creek, formed in 2018, said it would invest its $453 million that it raised, along with an additional $35 million from the SPAC’s sponsors and directors.
Thayers and Whipstich declined to comment. L’Oreal and Lazard didn’t return requests for comment.
Action item: Read more about Utz’s SPAC deal.