The Estée Lauder Companies Inc. (ELC) has increased its investment in DECIEM Beauty Group Inc., better known as “The Abnormal Beauty Company,” from approximately 29 percent to roughly 76 percent in its first phase. The transaction is expected to close in the quarter ending June 30, 2021.
ELC has agreed to purchase the remaining interests after a three-year period during the second phase.
“Over the last four years, we have built a truly special long-term partnership with the incredible DECIEM team, and we are excited for what the future holds,” said Fabrizio Freda, President and Chief Executive Officer of The Estée Lauder Companies Inc.
“DECIEM is an exceptional company. Nicola and her team have built and cultivated authentic brands with highly effective, must-have products using a vertically integrated model, and have fostered a uniquely transparent and engaging communication style. The company’s hero products, desirable innovation, and digital- and consumer-first high-touch approach have been instrumental to its success.”
DECIEM was founded in 2013 by the late Brandon Truaxe, who aimed to bring authenticity and transparency to the beauty industry. Truaxe developed the company alongside founder Pasquale Cusano and co-founder Nicola Kilner, who now serves as the CEO at DECIEM.
“Brandon dreamed of ELC being the forever home for DECIEM, and we are truly humbled to achieve his vision today,” said Nicola Kilner. “Prudvi, Stephen, our team and I will continue to build on Brandon’s creation, and we thank ELC for their continued commitment to our vision and future.”
Kilner works alongside Chief Scientific Officer Prudvi Kaka, who has an in-house team of biochemists and Stephen Kaplan, the company’s chief operating officer.
Since ELC’s initial investment in June 2017, DECIEM has witnessed massive growth, achieving net sales for the 12 months of roughly $460 million.
At the closing of the deal, Estée Lauder is expected to pay out approximately $1 billion, which reflects a total enterprise value of approximately $2.2 billion.
Upon closing, ELC expects to have a non-cash gain on its initial investment. Excluding this gain, DECIEM’s net sales and earnings are expected to negatively impact ELC’s fiscal year 2021 consolidated results.
The purchase price for the remaining interest in the second phase will be based on the future performance of DECIEM.