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BeautyMatter: Q2 2019 – Beauty Deals

In recent years it seems everything has been getting bigger—the investments, the deals, and without question, the exits. It used to be that billion-dollar exits were a rare event. Now the goal of beauty start-ups is unicorn status before even contemplating an exit. Activity in Q2 remained steady with Avon finally sealing the deal on new ownership and Edgewell Personal Care acquiring Harry’s for a reported $1.37 billion valuation.

Overall, it remains a seller’s market, and has been one for the past 10 years, noted John Potter, US deals sector leader at PwC. Potter told WWD that trends fuelling deals include companies looking to “buy assets to increase their capabilities, and/or bringing into the portfolio brands that consumers want as well as [adding assets] to build scale.”

Our latest article looks at 5 of the most eye catching deals. For the full article, visit BeautyMatter here.

1. Unilever acquires Tatcha for a reported $500 million

Unilever has added luxury skincare brand Tatcha to their growing portfolio for what industry insiders say was close to a $500 million deal, making it one of Unilever’s biggest acquisitions with the exception of its $1 billion acquisition of Dollar Shave Club in 2016.

Who: Tatcha was founded by Vicky Tsai 10 years ago after a trip to Kyoto, Japan, where she adopted the skincare rituals of the geishas to help fix her acute dermatitis. She sold her engagement ring to start the company, which was first known for its blotting papers, and gradually built out the product assortment using an ancient book of geisha beauty rituals as a roadmap. Tatcha works with scientists in Japan and the US to create each formula from a foundation of green tea, rice, and algae known as Hadasei-3™, a trinity of anti-aging superfoods born from the Japanese diet and the timeless wonder of Japan for transformative beauty, inside and out. Tatcha’s products have the Green at Sephora seal, are cruelty free, and are made without mineral oil, synthetic fragrances, or parabens.

Dutch conglomerate Unilever PLC was incorporated on June 21, 1894. The company’s segments include personal care, foods, home care, and refreshments. The company operates in more than 100 countries, selling its products in more than 190 countries. Unilever owns more than 400 brands including 11 “billion-dollar brands.”

Who: The acquisition will support Unilever’s expansion of its prestige beauty segment.

In their own words: Vasiliki Petrou, Unilever EVP and CEO Unilever Prestige, said in a statement, “We are delighted to have Tatcha joining our portfolio of Prestige brands. Inspired by Japanese pure beauty rituals, Tatcha is one of the best performing beauty brands in North America, famous for its exceptional product experience and unique combination of natural ingredients and high product efficacy. Thanks to Vicky’s passion and expertise, iconic products like The Water Cream and The Silk Canvas have become the cornerstone of long-term consumer loyalty. We are really looking forward to working with this amazing team and to continuing to grow the brand globally.”

Victoria Tsai, founder of Tatcha, said in a statement, “When creating Tatcha, our dream was to make a brand that would live for at least 100 years; that dream can come true in our new home with Unilever. We are overjoyed to have found a parent to grow globally with, and to have a purpose-driven partner to ensure we can have a positive impact in our communities as we grow.”


  • Unilever acquired Tatcha.
  • Terms of the Unilever acquisition were not disclosed, but according to WWD, industry sources said the number approaches $500 million, and that the brand is on track to do $100 million in net sales for 2019.
  • According to Tribe Dynamics, Tatcha closed 2018 with $81.5MM EMV, enjoying a 164% year-over-year growth that significantly outpaced the 58% increase averaged by 2018’s top 10 EMV-generating skincare brands. The brand’s $53.1MM EMV total between January and April 2019 represented a 100% year-over-year jump while the brand expanded its ambassador community by 55%.
  • Tatcha did not go through a formal M&A process for the deal. It happened as a result of the relationship Vicky Tsai built with Vasiliki Petrou, Executive Vice President of Unilever Prestige.
  • The brands did one $15 million round of funding.
  • In October of 2017 Castanea made a $15 million investment for what insiders say was a 30% stake in the business.
  • Beechwood Capital and Finn Capital Partners were early investors in the brand.
  • Under Unilever, Tatcha will continue to follow the geisha beauty book as a guide.
  • The brand will open a second headquarters in Tokyo.
  • Financo advised Tatcha on the transaction.

2. Canopy Growth acquires This Works for $73.8 million

Canopy has been building out its product portfolio with acquisitions since it received a $4 billion investment from Constellation Brands, the owner of Corona, and Robert Mondavi in 2018. Canopy Growth Corp has acquired beauty business This Works in an all-cash transaction of $73.8 million.

Who: Headquartered in London and founded in 2004, This Works offers a range of high-quality natural skincare and sleep solution products that have rewarded the company with a loyal following of customers purchasing their best-known products including deep sleep pillow spray, morning expert hyaluronic serum, and skin deep dry leg oil. Through their unique approach of formulating solutions that work in harmony with the 24-hr body clock, This Works has evolved its product lines beyond a traditional viewpoint to a more complete regimen that maximizes skin—and overall wellness—at every phase of the day, starting with a good night’s sleep.

Canopy Growth is a world-leading diversified cannabis, hemp, and cannabis device company. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site, and country at a time. The company has operations in over a dozen countries across five continents.

Tengram Capital Partners is a private equity firm that focuses exclusively on leading consumer and retail companies that own strong recognizable brands. The team has a diverse background of consumer investing and operating expertise that assists and guides company management to unlock the true potential of their brand. Tengram invests in both traditional “growth” and “restructuring/turnaround” situations in either the public or private sectors. Current beauty investments for Tengram include ReVive, Algenist, Cos Bar. Prior investments include NEST Fragrances, DevaCurl, and Laura Geller Beauty.

Who: The acquisition of This Works gives Canopy, which focuses on medical, health and wellness, and recreational hemp, a foothold into beauty and wellness. This acquisition is a key aspect of a multifaceted hemp and CBD strategy as Canopy Growth continues to build upon its vertically integrated production and marketing platform that currently includes thousands of acres of hemp production across several continents, hundreds of millions of dollars of capital investment into hemp-derived CBD production and processing, rapid expansion across the European Union and other key regions, and the introduction of new CBD-infused products and brands to the global beauty, wellness, and sleep solution space.

In their own words: “We’re framing up a line of business which, in part, will be driven by CBD as an active ingredient set, so we needed some party to work with that actually felt that science was important to getting it right, and having a brand and reputation based on outcome,” said Bruce Linton, Chief Executive Officer of Canopy Growth. “With the number of countries [This Works is] operational in, this is not a single regional success … the brand and the product work across multiple markets, which means as you extend [them], that should also be the case.”

“Since 2004, This Works has been committed to creating highly effective, natural skin solutions which are rooted in science and proven to work. We are excited about this new chapter in our company’s history and the opportunity to join Canopy Growth, the world’s leading diversified cannabis and hemp company,” shared Dr. Anna Persaud, Chief Executive Officer at This Works. “As a leading wellness brand and a pioneer in sleep beauty products, we are passionate about the opportunity CBD offers beauty consumers. Canopy Growth will provide the expertise, research, scientific rigour and quality assurance that will allow This Works to drive the agenda in wellness beauty’s ever-evolving market.”

“The interesting thing about This Works is it’s viewed much more as a wellness brand than a beauty brand because of its [success in] sleep.… This Works has never been just a skin-care brand—it’s about wellness,” said Rich Gersten, partner at Tengram.


  • Canopy Growth Corp. has acquired beauty business This Works for 43 million pounds.
  • According to WWD, industry sources estimated the company has between $10-$15 million pounds in sales.
  • Chief Executive Officer Anna Persaud said the business has posted a 39% compound annual growth rate over the past five years and is sold in 35 countries.
  • Together, Canopy Growth and This Works will continue to support all of This Works’ current distribution with an accelerated focus on global expansion and product development to include a new line of CBD skincare and sleep solutions.
  • Canopy has been building out its product portfolio with 30 acquisitions since it received a $4 billion investment from Constellation Brands, the owner of Corona, and Robert Mondavi, in 2018. In April, the business invested in High Beauty, which makes skincare that contains hemp seed oil and is sold at Sephora.
  • This Works has been backed by private equity firm Tengram Capital Partners since 2015.
  • This Works CEO, Dr. Anna Persaud, will remain post-acquisition to continue moving the company forward.

3. Edgewell Personal Care acquires Harry’s for $1.37 billion

Edgewell Personal Care Company and Harry’s announced that they have entered into a definitive agreement under which Edgewell will combine with Harry’s in a cash and stock transaction that values Harry’s at $1.37 billion. This transaction furthers the consolidation in the men’s grooming market with category disruptions being acquired by legacy players. Dollar Shave Club was acquired by Unilever for a reported $1 billion in 2016, and Procter & Gamble acquired Bevel as part of the Walker & Co. transaction last year.

Who: Harry’s has been a disruptive force across the men’s and women’s shaving market and adjacent grooming and personal care categories. Today, Harry’s is comprised of Harry’s—the company’s flagship brand, founded in 2013 by Andy Katz-Mayfield and Jeff Raider—Flamingo, and Harry’s Labs. Harry’s owns and operates its own razor factory in Eisfeld, Germany, and employs more than 900 people across the US, UK, and Germany. 

Edgewell is a leading pure-play consumer products company with an attractive, diversified portfolio of established brand names such as Schick and Wilkinson Sword men’s and women’s shaving systems and disposable razors; Edge and Skintimate shave preparations; Playtex, Stayfree, Carefree, and o.b. feminine care products; Banana Boat and Hawaiian Tropic sun care products; Playtex infant feeding; Diaper Genie; Bulldog and Jack Black male skincare and grooming products; and Wet Ones® moist wipes. The company has a broad global footprint and operates in more than 50 markets, including the US, CanadaMexicoGermanyJapan, and Australia, with approximately 6,000 employees worldwide.

Why:  The deal combines Edgewell’s scale, distribution network, product technology, and R&D Capabilities with Harry’s best-in-class brand building, design, and direct-to-consumer marketing and technology capabilities.

In their own words: “The combination of Edgewell and Harry’s is a pivotal step forward in further transforming our organization and strengthening our competitive position and ability to drive sustained growth and value creation,” said Rod Little, Edgewell’s President and Chief Executive Officer. “Building on Edgewell’s and Harry’s complementary strengths, our combined company will have leading brands and omni-channel capabilities that are essential to meet the needs of the modern consumer and win in today’s market environment. We welcome Harry’s entrepreneurial employees and look forward to working closely with Andy and Jeff, whose ingenuity and demonstrated success will enable us to take our US business to the next level. We are excited about our future and the opportunities we have to deliver superior long-term shareholder returns as a next-generation CPG platform.”

Andy Katz-Mayfield and Jeff Raider, co-founders and co-CEOs of Harry’s, said, “When we launched Harry’s six years ago our vision was to create a grooming brand that better met our needs as consumers, and over time, a CPG platform that creates brands people love across more categories. Together with Edgewell, we see a significant opportunity to continue delivering on that vision, leveraging Edgewell’s advanced technology and global footprint alongside our customer-first approach, brand building expertise and omni-channel capabilities. We’re incredibly proud of the brands we’ve created and the team we’ve built, and have tremendous respect for Edgewell and its established brand portfolio. We look forward to what we can accomplish together.”


  • Under the terms of the agreement, approximately 79% of the total value of the transaction will be paid in cash and 21% will be paid in Edgewell common stock. Upon completion of the transaction, Harry’s shareholders will own approximately 11% of Edgewell.
  • Edgewell intends to finance the transaction through a combination of cash on its balance sheet, net new debt, and equity. Bank of America Merrill Lynch has provided committed financing in connection with the transaction.
  • Edgewell and Harry’s will remain a distant second to Procter & Gamble’s Gillette brand, which commanded 47.3% of the American market last year, according to data from Euromonitor. Edgewell’s top brands held about 13.6% of the market, while Harry’s had about 2.6%.
  • Harry’s does roughly half of its sales in stores like Target and Walmart.
  • Harry’s owns nine factories, including a manufacturing facility in Germany.
  • Harry’s raised a $112MM minority growth round in February 2018 that brought the total money raised to $474.6MM in nine rounds since 2012. 
  • Edgewell executives told investors that Harry’s expects to be “generally” breakeven in 2019.
  • The combined company will be led by Edgewell’s President and Chief Executive Officer, Rod Little.
  • Andy Katz-Mayfield and Jeff Raider, Harry’s co-founders and co-CEOs, have agreed to join the Executive Team of Edgewell at closing, to serve as co-Presidents of US operations. Colin Hutchison will continue to serve as Chief Operating Officer and will lead the combined company’s international division. Additionally, Dan Sullivan will serve as Chief Financial Officer, Marisa Iasenza will serve as the Chief Legal Officer, and John Hill will serve as the Chief Human Resources Officer.
  • Upon completion of the transaction, the combined company’s board of directors will be expanded to add a new director selected by representatives of Harry’s.
  • Goldman Sachs & Co. LLC and Perella Weinberg Partners LP are serving as financial advisors to Edgewell, and Wachtell, Lipton, Rosen & Katz is serving as Edgewell’s legal advisor.
  • Centerview Partners LLC is serving as financial advisor to Harry’s and Latham & Watkins LLP and O’Melveny & Myers LLP are serving as its legal advisors.

4. Olly Nutrition acquired by Unilever

Announcing the acquisition of Olly Nutrition, Unilever makes its second investment in the nutritional supplement category that is projected to reach USD 7.64 billion by 2025. In 2018 they made a majority investment in Italian personal car and nutritional supplement maker Equilibra.

Who: San Francisco-based Olly Nutrition was co-founded in 2014 and established as a B Corp by Eric Ryan, who also previously co-founded home and personal care products company method. The brand is known for its gummy vitamins and supplements, and also sells protein powders and snack bars. The brand is distributed at Target, Sephora, Walmart, Walgreens, CVS, and Amazon, among others.

Dutch conglomerate Unilever PLC was incorporated on June 21, 1894. The company’s segments include personal care, foods, home care, and refreshments. The company operates in more than 100 countries, selling its products in more than 190 countries. Unilever owns more than 400 brands including 11 “billion-dollar brands.”

In their own words: “We are delighted to welcome Olly Nutrition to our portfolio of brands. Olly is a strong, innovative brand in the fast-growing health and wellbeing space, and nicely complements our businesses in Beauty & Personal Care and Foods & Refreshment. Olly’s focus on making nutrition delightfully easy aligns closely with Unilever values and our continued commitment to improving people’s wellbeing,” said Amanda Sourry, President of Unilever North America.

Eric Ryan, co-founder of Olly, said “We are thrilled to work with Unilever to grow the Olly brand and amplify our mission, culture and commitment to helping people feel happy inside out.”


  • Terms of the deal were not disclosed.
  • Olly will continue to be based in San Francisco and managed by Eric Ryan, who will assume the role of Chief Growth Officer, exploring further opportunities in the health and well-being area; and Gerry Chesser, current COO of Olly, who will take on the role of CEO of Olly.
  • The acquisition is subject to regulatory approvals and customary closing conditions.

5. Douglas acquires majority stake in Niche Beauty

German premium beauty retailer Douglas is acquiring a majority stake in Niche Beauty, an online business focused on premium cosmetics brands from around the world.

Who: Niche Beauty was established in 2011 by sisters Laetitia von Hessen and Sarah von Doetinchem together with their father Andreas Bechtolf to give customers in Germany access to a curated assortment of beauty products from around the world. They travel the world to unearth the latest insider tips and product trends for Niche Beauty’s 250,000 online shop visitors. Their growing community is a testimony to the management team’s talent for identifying and introducing attractive lifestyle brands.

Douglas is one of the leading retailers in the European beauty industry with about 2,400 stores and fast-growing online shops in 24 European countries. In the financial year 2017/18, the company generated sales of 3.3 billion Euros. Every day, around 20,000 dedicated beauty experts strive to make their customers more beautiful and thus happier. Douglas has a portfolio of some 50,000 high-quality products of more than 650 brands in the areas of perfumery, decorative cosmetics, and skincare as well as food supplements and accessories. With around 40 million Beauty Card holders, Douglas has one of the largest customer loyalty programs in Europe.

Why: The acquisition will strengthen Douglas’ position in the attractive luxury segment and allow Douglas to leverage its own high-performance platform to selectively support Niche Beauty’s rapid growth

In their own words:

“Our mission is to give our customers access to the world’s most exclusive cosmetic products. Teaming up with Douglas means we now have the support of one of the strongest and most renowned European beauty partners—this opens up completely new opportunities for us. Douglas is the ideal platform for Niche Beauty to ensure that the next phase of our growth is even more successful,” says Laetitia von Hessen, founder of Niche Beauty.

Sarah von Doetinchem adds: “We see ourselves as a lifestyle brand. Together with a strong organisation like Douglas, we can focus on raising awareness for our business, thereby making it more accessible to customers throughout Europe in the future.”

“We are always on the lookout for promising investments that improve our portfolio and fit our #ForwardBeauty strategy,” Tina Müller, Group Chief Executive Officer of Douglas, said in a statement, referring to the retailer’s brand strategy. “Niche Beauty enables Douglas to add a luxury assortment that perfectly complements the top end of our multibrand strategy.”

“With the Douglas online shop, parfumdreams and Niche Beauty, we are offering our customers a complementary product world in line with our platform strategy,” said Vanessa Stützle, Executive Vice President of e-commerce and CRM at Douglas.

“We see ourselves as a lifestyle brand,” von Doetinchem said. “Together with a strong organization like Douglas, we can focus on raising awareness for our business, thereby making it more accessible to customers throughout Europe in the future.”


  • Douglas has taken a 51% stake of Niche Beauty.
  • Terms of the transaction were not disclosed.
  • Niche Beauty’s founding family, Laetitia von Hessen, Sarah von Doetinchem, and Andreas Bechtolf ,will continue running the business.

BeautyMatter was born from Founder Kelly Kovack’s desire to provide a fresh voice to a beauty industry hungry for more content from her perspective, and through her lens. BeautyMatter aim to fill the void, connect the dots, and provide an informed, analytical, and compelling point of view. Exploring limits and blurring boundaries, they offer highly curated news and original content by thought leaders and beauty insiders.

The Red Tree is the UK’s leading international beauty brand consultancy and a powerhouse of ideas, insight and inspiration. For an informal discussion on how we might help you, please contact us.

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