In Brands, Finance

Unilever has added luxury skincare brand Tatcha to their growing portfolio for what industry insiders say was close to a $500 million deal, making it one of Unilever’s biggest acquisitions with the exception of its $1 billion acquisition of Dollar Shave Club in 2016.

WHO: Tatcha was founded by Vicky Tsai 10 years ago after a trip to Kyoto, Japan, where she adopted the skincare rituals of the geishas to help fix her acute dermatitis. She sold her engagement ring to start the company, which was first known for its blotting papers, and gradually built out the product assortment using an ancient book of geisha beauty rituals as a roadmap. Tatcha works with scientists in Japan and the US to create each formula from a foundation of green tea, rice, and algae known as Hadasei-3™, a trinity of anti-aging superfoods born from the Japanese diet and the timeless wonder of Japan for transformative beauty, inside and out. Tatcha’s products have the Green at Sephora seal, are cruelty free, and are made without mineral oil, synthetic fragrances, or parabens.

Dutch conglomerate Unilever PLC was incorporated on June 21, 1894. The company’s segments include personal care, foods, home care, and refreshments. The company operates in more than 100 countries, selling its products in more than 190 countries. Unilever owns more than 400 brands including 11 “billion-dollar brands.”

WHY: The acquisition will support Unilever’s expansion of its prestige beauty segment.

IN THEIR OWN WORDS: Vasiliki Petrou, Unilever EVP and CEO Unilever Prestige, said in a statement, “We are delighted to have Tatcha joining our portfolio of Prestige brands. Inspired by Japanese pure beauty rituals, Tatcha is one of the best performing beauty brands in North America, famous for its exceptional product experience and unique combination of natural ingredients and high product efficacy. Thanks to Vicky’s passion and expertise, iconic products like The Water Cream and The Silk Canvas have become the cornerstone of long-term consumer loyalty. We are really looking forward to working with this amazing team and to continuing to grow the brand globally.”

Victoria Tsai, founder of Tatcha, said in a statement, “When creating Tatcha, our dream was to make a brand that would live for at least 100 years; that dream can come true in our new home with Unilever. We are overjoyed to have found a parent to grow globally with, and to have a purpose-driven partner to ensure we can have a positive impact in our communities as we grow.”

DETAILS: 

  • Unilever acquired Tatcha.
  • Terms of the Unilever acquisition were not disclosed, but according to WWD, industry sources said the number approaches $500 million, and that the brand is on track to do $100 million in net sales for 2019.
  • According to Tribe Dynamics, Tatcha closed 2018 with $81.5MM EMV, enjoying a 164% year-over-year growth that significantly outpaced the 58% increase averaged by 2018’s top 10 EMV-generating skincare brands. The brand’s $53.1MM EMV total between January and April 2019 represented a 100% year-over-year jump while the brand expanded its ambassador community by 55%.
  • Tatcha did not go through a formal M&A process for the deal. It happened as a result of the relationship Vicky Tsai built with Vasiliki Petrou, Executive Vice President of Unilever Prestige.
  • The brands did one $15 million round of funding.
  • In October of 2017 Castanea made a $15 million investment for what insiders say was a 30% stake in the business.
  • Beechwood Capital and Finn Capital Partners were early investors in the brand.
  • Under Unilever, Tatcha will continue to follow the geisha beauty book as a guide.
  • The brand will open a second headquarters in Tokyo.
  • Financo advised Tatcha on the transaction.

Photo: via Tatcha

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