eCommerce giant THG has acquired prestige US skincare brand Biossance for $20m (拢16m) after just five hours of bidding.
Founded in 2015, Biossance has generated global revenues of $300m and is currently stocked in over 1,600 stores globally including Sephora, Harrods, Space NK, Douglas and Selfridges plus online through Lookfantastic and Cult Beauty.
In a statement on the London Stock Exchange this morning, THG announced it acquired 聽Biossance from US biotechnology group Amyris Inc, which recently commenced voluntary Chapter 11 proceedings.
An auction was held on November 30 with THG declared as the successful bidder for assets including IP, plus inventory and debtors with a book value of $29m.
Matthew Moulding, CEO of THG, commented: 鈥淲e are delighted to acquire the pre-eminent skincare brand Biossance.
鈥淭he technology-led, clean chemistry formulations resonate with consumers globally, evidenced by a strong performance on our own retail sites.
“We have significant experience in prestige skincare as an innovator and manufacturer, and through our own brand portfolio including Perricone MD and ESPA.
鈥淲e’re incredibly fortunate and excited to secure this opportunity to work with the Biossance team and further build on the brand’s strong awareness across the US.
“The fit within THG is perfect, with Biossance already generating c. $2m in revenue across our retail sites in the past 12 months. Integration on to the Ingenuity platform will commence as soon as the deal is finalised.”
Moulding followed up the announcement by 聽lifting the lid on the deal in a typically punchy LinkedIn post.
He said 2023 had been a difficult year for businesses generally because of the combination of inflation, 鈥榚xploding鈥� interest rates and a 鈥榳eary consumer鈥�.
Moulding said some 鈥榖latantly dubious characters鈥� in the media had piled into THG.
鈥淢aybe they had a 鈥楥hristmas drink鈥� riding on it?鈥� he asked. 鈥淲ell, they may now be tucking into a smaller turkey this year instead.
鈥淣ot only is聽THG still here, but we鈥檝e grown stronger and had some good fun in 2023. And now we鈥檝e managed to squeeze another piece of exciting news in before year end.鈥�
He said the deal to buy US beauty brand Biossance was a welcome change from foreign buyers gobble up UK companies like a game of 鈥楶ac-Man.鈥�
Explaining how the deal came about Moulding wrote: 鈥淟aunched in 2015, Amyris went on to invest $300m-$400m in building Biossance. $200m was invested in brand marketing alone, with Reese Witherspoon (pictured) the key ambassador, And so the Biossance brand equity is strong, especially across the US.
鈥淚n 2022, annual revenues reached almost $100m, but with losses of c$90m to match. Amyris, a bio-tech business, launched other, smaller, celebrity brands with a similar strategy.
鈥淭he losses and cash burn finally caught up, and聽Amyris went bust a few weeks ago, and all brands put up for sale.
鈥淯sually, there鈥檇 be a queue of buyers for a brand like Biossance but buyer interest was minimal. The only other serious bidder was a US PE firm.
鈥淲hy? In short, because nobody has a THG Ingenuity division. Biossance聽has a fantastic management team, led by Catherine Gore, but they need a new supply chain, tech platform, and cheaper routes to market. We bring these. Biossance should be immediately breakeven in聽THG.
鈥淎fter five hours of bidding, THG won by agreeing to pay $20m for Biossance. Included in the deal is c$23m of stock and $6m of receivables.
鈥淚f we do a good job in converting these assets into cash, it could mean we鈥檝e paid less than nothing for a large, US, premium beauty brand鈥�..Even UK companies can justify this!鈥�