Olaplex, the pioneer of the bond-building hair-care segment, has a new owner.
The brand has sold the company to Advent International, a large private equity firm that backed European beauty retailer Douglas until 2015. Terms of the deal were not disclosed, but industry sources said Olaplex has more than $100 million in sales, and that the company is valued at around $1 billion.
The deal closely follows another acquisition in the hair space. Last week, Henkel acquired DevaCurl, another hair business on track to do $100 million in sales for 2019.
Hair continues to be the hottest but smallest category in U.S. prestige beauty, according to the latest numbers from The NPD Group. The category gained 17 percent in the third quarter, to $207.7 million.
Olaplex was founded in 2014 by Dean and Darcy Christal, who commercialized a hair product that helps repair and protect hair from damage caused by things like heat styling or coloring. It has inspired a new category of bond-building hair-care products, which have in turn inspired a handful of lawsuits.
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The Christals will not be formally involved with the company once the deal closes, according to Tiffany Walden, Olaplex’s chief operating officer, who said the rest of the team will remain on board.
The private equity takeover is expected to help Olaplex grow its product assortment, distribution and geographic reach, according to Walden.
“We’ve had an amazing ride over the last five years, but think we’re just at the beginning of where this brand could be and we were looking for a partner who had experience and demonstrated success to be able to grow our brand in new channels, deeper in our existing channels and help us launch more fully globally,” Walden said.
“Olaplex is an incredible opportunity from our perspective. The Christal’s and Tiffany and the executive team have laid the foundation for a brand that we think truly has long-term global potential,” said Tricia Glynn, managing director at Advent. “If you think holistically about beauty right now, hair damage and hair health is a global phenomenon that we’re really at the beginning of, and we think Olaplex is the best positioned brand to serve that market.”
“In every country there’s that opportunity to touch not just the professional hair-care market, but also that prestige market, and we’re just at the beginning of being able to do that. So we’d be looking at going into new channels, and deeper through new product offerings or additional marketing and education support that we haven’t historically done,” Walden added.
While Glynn and Walden acknowledged that prestige hair care has not taken off on a global scale yet, both saw the potential.
“In prestige we’re looking to have products that deliver and if you can continue to deliver on her hair-care needs, wherever she is, whether it’s an Asian customer who’s getting digital perms or trying to go platinum, or the textured hair community, if you have products that perform, she wants those products and she’s willing to pay premium pricing for them,” Walden said.
Olaplex products are available in the professional channel, through salon treatments, and in retail, where the brand sells things like No. 4 Bond Maintenance Shampoo for $28 through Sephora. WWD reported in April that the company had tapped Financo Inc. to consider a deal.
Advent hired Goldman Sachs to advise on the deal. Aside from Douglas, the firm’s other investments have included Party City and Shoes for Crews, a designer of nonslip footwear for the restaurant industry.
In the beauty sphere, Olaplex is credited with creating a new category in hair care. The company’s core hair-strengthening product has allowed consumers to experiment more freely and frequently with hair coloring, with less hair breakage.
“Olaplex was the first product that actually prevented that damage on a structural level with the hair, and that’s what gave us the credibility with our customer. They were actually able to see results with a single use with our product,” Walden said.
Olaplex has certainly been able to generate social media conversation around its products — in Tribe Dynamics’ October report, the brand was ranked number one in terms of earned media value.
Since Olaplex’s 2014 launch, other companies, from L’Oréal to Madison Reed, have come out with their own bond-care products.
Olaplex has filed multiple lawsuits against L’Oréal in different markets, saying certain products from Matrix, Redken and L’Oréal Professionnel infringed on patents. The brand said it entered merger and acquisition talks with L’Oréal and that during that process, L’Oréal had access to proprietary information about Olaplex’s product formulations, but that a deal never materialized.
Olaplex won a judgement against L’Oréal USA in August in that case, and won a different case in the U.K. that L’Oréal has appealed.
Olaplex is the latest deal in a continually busy cycle for beauty M&A. Aside from Olaplex and Devacurl, on Monday, Coty Inc. said it was buying a majority stake in Kylie Cosmetics for $600 million. Before that, in October, Shiseido Co. Ltd. paid $845 million for buzzy skin-care brand Drunk Elephant, and earlier this year, Unilever is said to have paid nearly $500 million to acquire Tatcha, another cult skin-care line.
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