Shiseido announced that it will spend $845 million to acquire Drunk Elephant, the female-founded clean skincare brand which has become one of the fastest-growing prestige skincare brands in history.
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Shiseido announced Tuesday that it will spend $845 million to acquire Drunk Elephant, the female-founded clean beauty brand that has become one of the fastest-growing prestige skincare companies in history.estimates that 50-year-old founder Tiffany Masterson, who will stay on with the brand under Shiseido as chief creative officer and president, will pocket roughly $120 million when the sale closes at the end of the year.
Drunk Elephant had net sales of close to $100 million last year. It’s been backed by San Francisco based private equity firm VMG since 2017. The brand first signaled it was open to an acquisition earlier this year. The $500 billion beauty industry has been going through a boom in recent years. It was first fueled by a growing market for makeup, and big beauty conglomerates were willing to pay high prices for these hot companies, like It Cosmetics, whicha valuation of more than six times sales. But as the cosmetics industry has contracted more recently, investors and publicly traded beauty companies have turned to skincare.
Drunk Elephant was hoping it could fetch a valuation of more than $1 billion, but even at $845 million, the implied valuation is more than eight times sales, making the Drunk Elephant acquisition one of the biggest ever for a skincare brand.. With the help of a contract chemist, Masterson developed serums and creams formulated without what she deemed as the “suspicious six” ingredients: essential oils, drying alcohols, silicones, chemical sunscreens, fragrances and sodium laurel sulfate.
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