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Betterware to Acquire Jafra's Operations in Mexico and US

January 24, 2022
January 24, 2022

Betterware de Mexico S.A.P.I. de C.V. has signed a definitive agreement to acquire 100% of Jafra's operations in Mexico and the United States from the Vorwerk Group based in Germany for $255 million.

WHO: Jafra is a world-leading brand of direct selling in Beauty and Personal Care with a strong presence in Mexico and the United States, with 443K independent leaders and consultants selling products. The business is vertically integrated, with an end-to-end operation encompassing product development, R&D, manufacturing, and distribution. The company has more than 1,200 SKUs in four different business segments: Fragrances, Color & Cosmetics, Skin Care, and Toiletries. Jafra has a proven track record and a profitable business model with high cash-flow generation, and over 65 years of experience in the direct selling of beauty products.

Founded in 1995, Betterware de Mexico is the leading direct-to-consumer company in Mexico focused on creating innovative products that solve specific needs regarding organization, practicality, space saving, and hygiene within the household. The company has a differentiated two-tier network of distributors and associates that sell their products through 12 catalogues per year. Today, the company distributes its products in Mexico and Guatemala, and has plans of additional international expansion.

The Vorwerk SE & Co. KG family enterprise was founded in 1883. The holding company is based in Wuppertal, Germany. Vorwerk's core business encompasses both the production and sale of high-quality household products. As a direct sales company, Vorwerk always seeks direct contact with its customers. The Vorwerk family also includes Neato Robotics and the AKF Bank. Vorwerk generated consolidated sales of €3.2B in 2020 and operates in more than 60 countries.

WHY: Both companies use consultant sales forces to sell their products. Betterware's team sells household goods, including cleaners and kitchenware, and Jafra's consultants sell beauty products. The transaction allows Betterware to expand into beauty while also expanding its geographic footprint to the United States, enhancing its international focus to the North American market.

IN THEIR OWN WORDS: Luis G. Campos, Executive Chairman of Betterware's board, stated, "We are excited to announce the acquisition of Jafra and believe it represents a perfect strategic fit for Betterware. This acquisition will expand our growth potential as we extend our geographic reach to include North America, strengthen our positioning in Mexico and expand our categories served to include the Beauty and Personal Care products. With the addition of Jafra's ~443K independent leaders and consultants, the acquisition will also provide us with opportunity to continue to capitalize on the strong direct-selling online market trends and the substantial e-commerce opportunity we see for our business. We believe significant growth opportunity lies ahead for Jafra through continuation of their digital transformation, which will be accelerated by leveraging our scale and infrastructure, and we look forward to welcoming the entire Jafra team to our Company."

Betterware executives said the company was looking at acquisitions where it could replicate its direct-selling model in other categories. "The fundamentals are there in Jafra, and this will make it easier to replicate our business model and diversification because we are already in home solution products…what we are going to do is to replicate our business model there. We can bring a lot of great initiatives in terms of product innovation," Campos told analysts.


  • Betterware de Mexico has signed a deal to acquire Jafra's US and Mexican operations from Vorwerk Group for $255 million.
  • The purchase price implies a valuation multiple of 5.5x 2022E EBITDA before the identified cost synergies of $5-$10MM, and 4.8x 2022E EBITDA considering the mid-point of the synergies.
  • The acquisition is expected to be funded through a combination of $225MM debt financing and $30MM of existing cash on hand.
  • Betterware expects the acquisition to be highly accretive in the first year. The deal is expected to add approximately $.341/share to EPS in 2022E and over $46MM of EBITDA without considering any of the identified cost synergies.
  • While there are opportunities for synergies between the two businesses, the plan is to continue operating separately.
  • 15 to 20% of the Jafra business is in the US, where Betterware hopes to grow its homewares business, and the rest is in Mexico.
  • The deal is expected to close in the first half of 2022, pending regulatory approval in Mexico.
  • The Vorwerk Group acquired Jafra in 2004 from a fund managed by Clayton, Dubilier & Rice, Inc., which owned approximately 85% of Jafra. Clayton Dubilier bought Jafra from the Gillette Co. in 1998.

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