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Shiseido falls over Drunk Elephant in USD 845mn deal
Posted on Wednesday, 09 October 2019 10:49
Japanese makeup, skincare and fragrance company Shiseido has reached an agreement to acquire fast-growing skincare brand Drunk Elephant for USD 845.00 million.
The buyer plans to fund the deal using a combination of cash on hand and bank borrowings, with the addition of the target to significantly expand its global portfolio and presence.
Founded in 2013 by Tiffany Masterson, Drunk Elephant has gained a significant following from Generation Z and Millennials over recent years and is a popular brand among social media influences.
The company uses biocompatible ingredients that directly benefit the skin’s health and support the integrity and effectiveness of the formulations.
Drunk Elephant will be able to leverage Shiseido’s global platform and resources to expand into new and existing markets both in the US and internationally.
Masterson is expected to continue in her role as creative chief and assume an additional title of president, following completion.
Closing is scheduled for the end of the year and remains subject to regulatory approvals.
In January this year, the Wall Street Journal reported Drunk Elephant could be exploring a sale in hopes of fetching a USD 1.00 billion valuation.
Four months later, the Sunday Telegraph observed that Unilever may be interested in the skincare brand.
Drunk Elephant has an impressive growth trajectory, according to Shiseido, and is well position to achieve sales in excess of USD 100.00 million in 2019.
Zephyr, the M&A database published by Bureau van Dijk, shows there have been 224 deals targeting toilet preparation manufacturers announced worldwide in 2019 to date.
The acquisition of Drunk Elephant by Shiseido is the tenth-largest of these, with the number one transaction by value involving Natura Holding buying Avon Products for USD 4.23 billion.
Unilever sold a 3.0 per cent interest to Norges Bank for EUR 2.38 billion in the second-biggest deal, which is followed by General Atlantic agreeing to pick up a majority stake in Morphe Holdings for USD 2.00 billion.
Other targets have included Coty, Laboratoires Filorga's skincare activities, Fancl and Elemis.
© Zephus Ltd