E.l.f. is coming for your pores. And your arms, legs, and bottom, too. On Tuesday 29th August, E.l.f. announced it would acquire white hot indie skin care brand Naturium. The $355 million cash and stock deal is the largest in E.l.f.’s history and will move the disruptive Gen Z upstart one step closer to becoming the next beauty juggernaut. It will also solidify them as a major player in the rapidly evolving marketplace for “cleanical” skincare.
“We believe Naturium joining E.l.f. Beauty, and complementing E.l.f. Skin and our existing brand portfolio presents a unique opportunity to significantly accelerate the potential we see in skin care,” Tarang Amin, E.l.f. Beauty’s Chairman and Chief Executive Officer told CEW. “This is expected to double our skin care presence to approximately 18%. With this acquisition, we’re adding a distinct yet complementary brand that we expect to be accretive to both our growth profile and earnings.”
Created in 2019 by beauty incubator, the Center, with influencer founder Susan Yara, Naturium has been a breakout success on social media, where the hashtag #naturium currently has over 415+ million views. The brand, which leads with a no-nonsense, ingredients-first approach, has won favor among the dermatological community, men (40% of their users are male) and millennial consumers who do their skincare research.
Best-selling products include The Glow Getter Multi-Oil Hydrating Body Wash, Vitamin C Complex Serum, and Dew-Glow Moisturizer SPF 50. Net sales of Naturium grew at approximately +80% CAGR over the last two years. And approximately $90 million of net sales are expected this year.
E.l.f. first entered the skincare category in 2015. In 2020, it acquired clean skincare company W3II People and Alicia Keys skincare line, Keys Soulcare. In June of 2020, E.l.f. took their commitment to skincare one step farther, creating their fourth portfolio brand, E.l.f. Skin. The collection includes three separate segments: Blemish Breakthrough, Pure Skin, and Holy Hydration!
With Naturium’s expertise in clinically-effective, clean skincare formulation in both the face and bodycare category (an area E.l.f. skin currently only has modest offerings in) it’s easy to see why Naturium was an appealing acquisition of E.l.f. which is one of the fastest growing skin care brands right now. In August, the brand raised their 2024 outlook after posting quarterly net sales growth of 76%, marking 18 consecutive quarters of more than 20% sales growth on average.
Asked if the E.l.f. has plans to acquire other brands, Amin was optimistic but refused to elaborate. “We have been transparent about our desire to pursue strategic extensions that can leverage our strengths and bring complement capabilities to E.l.f. and we have remained highly disciplined.”
“With efficacious products at accessible price points and a community first mindset, Naturium reminds me of where e.l.f. was when I became CEO over nine years ago,” he said in a statement. “Naturium demonstrates the same spirit, values and growth characteristics we find in E.l.f.”
“I have admired E.l.f., and their deep commitment to being a different kind of beauty company, for years now, said Susan Yara, Naturium’s Founder, in a statement. They care about their community and their employees, which is truly meaningful to me, especially as a female founder. 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.”
First published on CEW.org – By Amy Synnott – Published 29th August 2023