Jessica Alba’s Honest Co. is still playing the field, but spending lots of time with Unilever lately.
The five-year-old consumer products company — which launched Honest Beauty last year and also sells diapers and cleaning supplies — has explored an initial public offering and talked to numerous suitors, but sources said the most active would-be buyer right now is Unilever.
WWD reported in February that Honest was exploring an IPO, but by April the firm, which hired Morgan Stanley and Goldman, Sachs & Co. as advisers, was also considering a sale to a strategic player. As recently as July, both Unilever and Johnson & Johnson were both seen as in the running.
Sources stressed the talks with Unilever are still in the very preliminary stage and that no deal is imminent. Shares of Unilever slipped 1.7 percent to $44.94 on the New York Stock Exchange midday Friday.
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Honest — which was founded by Alba, Christopher Gavigan, Sean Kane and Brian Lee, who serves as chief executive officer — has reasons to keep its options open. The company, which is said to have sales of about $300 million, has a hot brand and is backed by star power and big money. Honest has raised $228 million so far, according to S&P Capital IQ, with its most recent round last year valuing the firm at about $1.7 billion, although it’s not clear exactly how much Honest would get in a sale.
The public markets right now might be a more difficult path than a sale since IPOs have been few and far between lately.
Honest has also faced allegations that its goods, which are marketed as safe, effective and responsible, don’t exactly live up to their billing, although the firm stands by its products.
Those concerns, however, don’t seen to have hurt the business too much and Honest told WWD this year that: “The first quarter of 2016 was the strongest quarter ever for The Honest Co., 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.”