Unilever's optimised portfolio requires more "pruning".Author: Yang Xue.
Editor: Tuya
On December 18, consumer goods giant Unilever (ULUS) announced that it will sell its non-core beauty and personal care division, Elida Beauty**, to Yellow Wood Partners, a U.S. private equity firm.
Financial terms of the transaction, which are expected to close in mid-2024, are not yet disclosed. People familiar with the matter said the deal is expected to be worth less than $1 billion (about 7.1 billion1.1 billion yuan).
Elida Beauty's product portfolio includes more than 20 beauty and personal care brands, including Caress, Tigi, Timoti, Mons**On, St ives、zwitsal、pondsPon's, Brut, Moussel, Alberto Balsam and Matey,The business generated about 7$600 million (about 54.)0.5 billion yuan).
The acquisition of Elida Beauty will be the second time in a year that Yellow Wood has acquired a non-core brand from UnileverIn May this year, it also acquired Unilever's personal care brand Su**E. According to public information,Yellow Wood is a Boston-based company focused on investing in the consumer sectorBrands invested include sun-tanning brand Isle of Paradise and foot care brand Dr scholl's。
Unilever first attempted to spin off Elida Beauty in 2021 and eventually abandoned it at the end of the same year. This is mainly due to the fact that other consumer goods companies did not meet their valuation expectations when selecting brands to acquire. Unilever then worked to turn Elida Beauty into an independent subsidiary. In a business model restructuring in 2022, Elida Beauty merged with the **Cleansing, Oral Care and Deodorant brands to form a personal care business. Elida Beauty's personal care division alone had 50,000 stocks taken down and more than 60 local brands were delisted.
After succeeding Unilever in July, Unilever's new chief executive, Hein Schumacher, restarted the business's first process, hiring Morgan Stanley and Evercore investment banks to assist. He said recentlyThe company will now focus on 30 key brands, which account for 70% of its sales
On October 16, Unilever also sold its men's grooming brand, Dollar SH**e Club (DSC), to Nexus Capital Management LP, an American private equity firm. It is reported that Unilever will retain a 35% minority stake in DSC for strategic adjustment reasons, and the transaction is expected to be completed this year.
In November, two Unilever factories in New York were laying off employees in beauty and personal care products. Unilever revealed in a filing with the New York Department of Labor that two factories in Amityville and Farmingdale on Long Island will lay off 169 workers in April 2024.
"Over the past six years, our sales growth has lagged, and it has been difficult for us to achieve and maintain our competitiveness at the expected level. "UnileverOptimizing the mix requires more "pruning work".and will focus on three directions: accelerated growth, productivity and simplification, and performance cultureTake action. "Unilever will not make major or transformative mergers and acquisitions for the foreseeable future. ”
In the third-quarter financial report, Unilever mentionedSuperBrands of 1 billion euros account for 56% of turnover。InDove, Hellmann'S, Rexona, and SunsilkUnderlying sales increased by 72%, where the pricing increase brings 57% growth, sales growth brought 14%**.
During the economic downturn, Unilever began to feel powerless about the acquisition, and at this stage it is busy "reintegrating its business, cutting out businesses that are not performing well, and focusing more energy and resources on businesses with more objective growth rates." Elida Beauty and DSC's ** is part of the action.