Direct-marketing beauty business Guthy-Renker is considering a sale of Proactiv, according to two industry sources. Guthy-Renker declined to comment.
The brand is one of Guthy’s largest, bringing in an estimated $876 million in U.S. retail sales for 2014, according to data from Kline. One source estimates sales for 2015 were roughly $1 billion, and a potential deal could be valued at $2 billion or more.
Nestlé, which owns roughly 23 percent of L’Orèal, is close to inking an acquisition agreement for the skin-care line, one source said, suggesting that the length of the non-compete with founders Katie Rodan and Kathy Fields has caused negotiations to move more slowly. The source said aside from that, most of the terms of a deal have been negotiated. Nestlé did not return a request for comment by press time.
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Proactiv was developed by dermatologists Rodan and Fields in 1995, and its multiproduct, acne-treatment regimen has been touted in infomercials by celebrity spokespeople including Adam Levine, Olivia Munn and most recently, Sarah Michelle Geller. (Rodan and Fields also developed the skin-care line Rodan + Fields.)
Guthy-Renker, headquartered in Santa Monica, Calif., is also behind another acne-treatment line, X Out, as well as Meaningful Beauty and Wen hair care, which is facing a potential class-action lawsuit from consumers alleging the product causes hair loss. Guthy is also one of the backers of IT Cosmetics, which has reportedly considered an initial public offering. Other product lines in the business include Crepe Erase and Perricone Sub-D. Guthy-Renker ranked at No. 24 on WWD Beauty Inc’s Top 100 list with more than $1.8 billion in estimated sales for 2014.
Proactiv has recently revamped its marketing strategy to cast a wider net, Megan Drogmund, senior director of brand management for Guthy, said at the WWD Beauty Forum in February. The goal is to use authentic stories and feature celebrities in spots of varying lengths to reach different target demographics, she said.