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Unilever Is Buying Paula’s Choice

Paula's Choice is said to be growing quickly.

Unilever has signed a deal to acquire skin care brand Paula’s Choice for around $2 billion, according to industry sources.

Terms of the deal were not disclosed, and Unilever declined to comment on the price tag. WWD had previously reported in April that the brand was exploring M&A options, and that the business is expected to do more than $300 million in net sales for 2021.

Paula’s Choice was founded in 1995 by Paula Begoun, who authored “Don’t Go to the Cosmetics Counter Without Me” and “The Complete Beauty Bible.” Begoun was an early advocate for ingredient transparency in beauty, and Paula’s Choice was one of the first skin care brands to create an ingredient dictionary.

Paula’s Choice is well known for products like 2% BHA Liquid Exfoliant and Niacinamide 20% Treatment. 

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The brand is primarily sold direct-to-consumer online, but also sells with Nordstrom and recently launched with Sephora

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In a February interview, Paula’s Choice chief marketing officer Erika Kussmann said the brand was the largest d-to-c skin care brand in the world, and that the line had garnered Gen Z attention on TikTok and Reddit. 

“The really great thing about d-to-c, working digital, is you have a very clear sense of the potential market and you can identify really high-potential audiences of people who haven’t been introduced to the brand yet,” Kussman said. “That gives you this idea of runway, and we know that there’s so much more ahead there.” At that time, just over 50 percent of Paula’s Choice’s sales came from international markets. 

Paula’s Choice will become part of Unilever Prestige, run by Vasiliki Petrou, who called the brand “a true pioneer in the digital space” and “a mission-based brand rooted in truth and transparency.”

Unilever plans to bring Paula’s Choice to a larger audience of customers, Petrou said.

“Developing Unilever’s portfolio in the high-growth premium skin care segment is one of our strategic priorities and I’m excited that Paula’s Choice is joining us on this journey,” said Unilever Beauty & Personal Care president Sunny Jain in a statement.

Paula’s Choice is being sold by TA Associates, which invested in the business alongside Bertram Capital in 2016. At that time, the brand’s revenues were said to be around $70 million and the business was valued at $275 million.

The Unilever deal is expected to close in the third quarter. Industry sources said the brand hired three banks — Financo Raymond James as lead adviser, Piper Sandler and Morgan Stanley — for the deal. 

For Unilever, Paula’s Choice adds another strong direct-to-consumer business to its prestige skin care lineup. Unilever also owns Tatcha, which it bought for nearly $500 million in 2019, as well as Murad, Dermalogica, Kate Sommerville and Ren. 

The acquisition comes as Unilever re-thinks its beauty holdings. Executives have said publicly that the company is considering options for some of the smaller beauty and personal care brands sold in Europe and North America. 

The coronavirus pandemic has caused many of beauty’s largest players to evaluate their brand portfolios, with many said to be considering divestitures.

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