Yellow Wood Partners is adding ChapStick to its growing consumer brand portfolio.
The Boston-based private equity firm said Thursday it would pay consumer health company Haleon $430 million for the lip balm brand, which dates back to the 1880s.
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“ChapStick has the highest brand awareness in lip care, as well as the strongest purchase conversion among all brands in the category. We look forward to completing this transaction in the first half of 2024.”
According to Haleon, ChapStick generated 112 million pounds in revenue in 2023.
Brian McNamara, chief executive officer of Haleon, explained the decision to sell in a statement. “While ChapStick is a great brand, much loved by consumers around the world, it is not a core focus for Haleon. Selling the brand allows us to simplify our business and pay down debt more quickly. We’re confident the brand will continue to thrive under its new ownership.”
Yellow Wood has been busy lately. In December, Unilever confirmed that it had a binding offer from the private equity firm to acquire its Elida portfolio, which generated turnover of around 800 million euros in 2022 and includes household brands Q-tips, Caress, Timotei and Tigi.
In February 2023, Unilever also sold its Suave business in North America to Yellow Wood.
“ChapStick will be Yellow Wood’s fifth corporate carveout transaction in the past four years. The firm prides itself on having become a trusted partner to CPG companies to carve brands out and set them up for their next stage of growth,” Tad Yanagi, partner at Yellow Wood, said.
ChapStick will sit in Yellow Wood’s Suave Brands division. As part of the deal, Haleon will have a passive minority interest in the Suave Brands Company valued at $80 million.
“The Yellow Wood team established Suave Brands Company in May 2023 to acquire the Suave brand from Unilever. We saw the opportunity to grow Suave with a more focused management approach while also creating the corporate infrastructure to acquire and manage additional personal care brands across multiple categories to drive synergies across the platform,” Daniel Alter, CEO of Suave Brands, said.
He stressed that Yellow Wood is not done with its shopping spree. “We look forward to continuing to build Suave Brands Company by identifying additional personal care brands to add to the portfolio.”
Yellow Wood’s diverse portfolio of consumer brands also includes Dr. Scholl’s, Real Techniques, Byoma, and self-tanning brands Isle of Paradise, Tanologist and TanLuxe. The firm previously built up a multibrand personal care business in PDC, owner of Dr Teals, Cantu and more, which it sold to CVC Capital partners in 2017.
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