Jessica Alba’s The Honest Co. is said to have put the brakes on its potential initial public offering and is now focusing on finding a buyer.

The buzzy consumer company, which has been dogged by complaints and lawsuits that its products don’t live up to their billing, hired Goldman Sachs and Morgan Stanley to explore options months ago and is now quietly courting suitors.

Johnson & Johnson and Unilever have both looked closely at the firm, according to one financial source.

In general, Honest’s efforts to find a corporate connection have been slowed by the $1.7 billion valuation it was tagged with after its latest fund-raising round in August. Goldman helped Honest raise $100 million last year and $70 million in 2014 from heavy-hitting investors including Wellington Management Group, AllianceBernstein LP, and Fidelity Management & Research Co.

Whoever buys the company is betting on its future rather than the present. Honest Co. is still in start-up mode, meaning it isn’t profitable. While some estimate the company has sales of about $300 million, other sources said revenues are only about $100 million. The ongoing losses are causing potential buyers to hesitate on the hefty purchase price, a source said. The company and Morgan Stanley declined to comment and Goldman did not respond to a request for comment by press time.

Several sources said lawsuits tied to allegations that the company’s sunscreen is ineffective and that its marketing is deceptive in regards to its use of chemicals made an IPO a difficult path to pursue.

“Any company that goes public must endure the greatest scrutiny in its corporate history — the equivalent of an army of mothers-in-law, head nurses and drill sergeants inspecting every closet and corner,” said Susan Scafidi, founder and academic director of the Fashion Law Institute at Fordham Law School.

“Pending lawsuits must be reported as risks to the company and may scare off investors, driving down the potential value of the IPO,” Scafidi said. “In an era when many companies are making social responsibility and other ethical claims part of their ethos and thus their value, they need to show more than simple profits to attract customers and investors. A company bold enough to name itself ‘Honest’ had better appear to be that and more — or wisely delay the IPO until it does.”

Attorney Douglas Hand of Hand, Baldachin & Amburgey added that a potential buyer has the time to fully understand the ramifications of the allegations.

“In the context of complex litigations like these, one simple answer is the investor or [mergers and acquisitions] partner is in a much better position to evaluate the risks associated with that litigation and will spend the time and conduct the diligence to do so, whereas the investing public is much less likely to engage in that level of diligence and make their investment decision more on a gut reaction,” he said.

While the lawsuits certainly factor into any investment equation, it’s not clear the broad consuming public has tuned in.

Honest told WWD last month: “The first quarter of 2016 was the strongest quarter ever for The Honest Company, and we just had our strongest month to date in April 2016. Our customers’ love for our products and trust for our brand, as evidenced by this exceptional revenue performance, are the fundamental measures of our growth and the strength of our business.”

Financial sources suggested Honest might need to do a deal one way or the other and that an m&a transaction is simply the better way to go.

Honest to some degree is a victim of circumstance — a hot name with the right backing, pedigree and profile that is coming of age in an extremely blah market, when investors are feeling shaky over macroeconomic, social and geopolitical turmoil. There were only 42 IPOs in the first half, a steep drop from the 104 offerings a year earlier, according to Renaissance Capital. The deal side has also been slow, with Merger Market seeing a 51.4 percent drop in the value of first-half consumer deals, to $95.4 billion.

“The public markets in a lot of ways are very broken,” said Martin Okner, managing director at SHM Corporate Navigators. “There’s so much regulation, so much focus on quarterly performance, that you jeopardize the long-term focus in favor of meeting quarterly expectations, and for a single-branded company like Honest, an IPO would be very hard for them to sustain as an unprofitable, growth-focused company. It’s not a tech company where you get a free pass on being profitable.”

Okner also said it’s less likely a private equity firm would seek to buy in at Honest than another consumer products player.

“A strategic is a more likely player,” he said. “The company would need to be more flexible on their valuation expectations if they choose a private equity interest as an interim step because they are going to need to be more focused not just on growing the top line, but on making operational enhancements and getting to profitability.” 

Andrea Weiss, founder of The O Alliance, said, “The reality of it is that in today’s environment in the consumer business, if you can get a strategic to buy you and not have to live with the dynamics of the public market…that’s a wonderful outcome.”