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Bid Deadline Approaches for Elemis Sale Process, Sources Said

Right now, the M&A process is said to focus exclusively on strategic buyers.

Bids are due Dec. 20 for L Catterton-backed skin-care brand Elemis, said sources familiar with the auction.

At this point, the process is focused exclusively on strategic buyers, sources said.

The high-end skin-care brand has tapped Jefferies as lead bank, with Nomura, to run a sale process, the sources said. The Elemis business has $140 million in net sales and $40 million in earnings before interest, taxes, depreciation and amortization, and is expected to post net sales in 2019 of $185 million with EBITDA of $55 million, according to industry sources.

Spokespeople for Jefferies, Nomura, L Catterton and Elemis declined to comment.

Elemis’ line includes products such as Pro-Collagen Marine Cream SPF 30, $128, and Peptide 4 Eye Recovery Cream, $49, that are sold in multiple points of distribution, including Ulta Beauty, QVC, Amazon and cruise ships — something the brand got into through sister company OneSpaWorld.

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Both brands were part of Steiner Leisure, which Catterton bought in 2015 for $925 million. In November, the PE firm sold OneWorldSpa to a special purpose acquisition vehicle called Haymaker Acquisition Corp. Now, the Steiner Leisure portfolio includes Elemis, as well as Bliss and other spa lines.

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Elemis’ growth has come from both the U.S. market with Ulta Beauty and the U.K., sources said. The brand is also carried at Australia’s Mecca but has limited exposure to Asia. Right now, it’s sold into the country cross-border through FeelUnique and has plans to enter Tmall, according to industry sources.

Elemis is not the only L Catterton-backed brand with Asia as a white space — StriVectin, which the firm is said to have tapped Houlihan Lokey to sell — also has room to grow in the region.

Both skin-care brands are hitting the market at a busy time in the skin-care world, which is in demand as U.S. Millennials ramp up their wellness rituals and has long been the most popular beauty category in Asia. In the U.S., prestige skin care was up 15 percent in the third quarter, to $1.3 billion, according to numbers from the NPD Group.

The category has been fueled by a shift toward natural and “age specialist” products, according to NPD. Elemis hits on both of those trends with an antiaging line featuring botanical ingredients such as acai, moringa and sea buckthorn that are explained in detail on the Elemis web site.

Strategic buyers have been very busy over the past few years, acquiring brands and technologies. But some sources say there has been a bit of a slowdown in recent months as few big brands are left on the market for large beauty companies to buy. The trend has also shifted away from buying makeup brands — which reached the height of popularity between 2014 and 2016 — to buying skin care, hair care and capabilities.

Recent acquisitions have come from Procter & Gamble, which bought First Aid Beauty from Castanea Partners earlier this year for about $250 million; L’Oréal, which acquired augmented reality and artificial intelligence business ModiFace in March, and Shiseido, an avid acquirer that recently added “second-skin” technology from Olivo Laboratories.

For more from, see: 

Beauty Investors Seek Wellness Deals as Consumer Focus Shifts to Self-Care

European Beauty M&A Activity Heats Up

L’Oréal’s Carol Hamilton on Her Approach to Acquisitions