NEW YORK - The Estée Lauder Companies Inc. (NYSE:EL) announced the completion of its acquisition of DECIEM Beauty Group Inc., a Canadian skincare company, on May 31, 2024. Estée Lauder, which first invested in DECIEM in 2017 and became its majority owner by 2021, has now acquired the remaining interests for approximately $860 million, with the total investment net of cash amounting to around $1.7 billion over three tranches.
DECIEM, also known as The Abnormal Beauty Company, is recognized for its commitment to ingredient transparency and its flagship brand, The Ordinary, which has achieved significant market presence in North America and Europe. The acquisition is seen as a strategic expansion of Estée Lauder's skincare portfolio, targeting millennial and Gen Z consumers through DECIEM's digitally native business model and innovative approach to beauty.
Fabrizio Freda, President and CEO of Estée Lauder, expressed pride in DECIEM's growth and its alignment with Estée Lauder's mission to offer high-quality skincare. Nicola Kilner, Co-Founder and CEO of DECIEM, highlighted the partnership's success in maintaining the company's core values while expanding its operational capabilities and market reach.
DECIEM has leveraged Estée Lauder's resources since 2017, resulting in an expanded global consumer base and increased profitability. The Ordinary, part of Estée Lauder's scaling brands, has launched in key international markets, including India, the Middle East, and South Africa, and has introduced new products contributing to its sales growth.
DECIEM was founded in 2013 by the late Brandon Truaxe and is headquartered in Toronto, Canada. The company's portfolio includes NIOD, a skin science brand, and AVESTAN, a fragrance brand, among others. With in-house labs and a team led by Kilner and Jesper Rasmussen, Global Senior Vice President and General Manager, DECIEM continues to emphasize authenticity and transparency.
Estée Lauder's Executive Chairman, William P. Lauder, and Executive Group President, Stéphane de La Faverie, both praised DECIEM's values and the successful partnership over the years.
The Estée Lauder Companies is a global leader in the manufacture and marketing of premium beauty products, with a portfolio of over 25 brands sold in approximately 150 countries. The completion of this acquisition marks a significant milestone for the company, as it continues to shape its presence in the beauty industry.
This article is based on a press release statement from The Estée Lauder Companies Inc.
InvestingPro Insights
The Estée Lauder Companies Inc. (NYSE:EL) has demonstrated a commitment to growth and shareholder value through its recent acquisition of DECIEM Beauty Group Inc. The company's strategic moves can be further analyzed through key financial metrics and insights provided by InvestingPro. Estée Lauder boasts a robust gross profit margin of 70.77% for the last twelve months as of Q3 2024, highlighting its efficiency in converting revenue into profit. This is a significant indicator of the company's strong pricing strategy and operational effectiveness, which are critical in the competitive beauty industry.
InvestingPro Tips reveal that Estée Lauder has maintained dividend payments for 29 consecutive years, showcasing its reliability and commitment to returning value to its shareholders. This consistency is particularly noteworthy given the company's significant investment in DECIEM, illustrating its financial discipline and strategic capital allocation. Additionally, Estée Lauder's liquid assets exceed short-term obligations, indicating a healthy liquidity position that can support ongoing investments and operations.
With a market capitalization of $44.23 billion, Estée Lauder is trading at an earnings multiple of 68.87, suggesting that investors may have high expectations for future growth. While some analysts have revised their earnings expectations downwards for the upcoming period, others remain optimistic about the company's profitability in the current year. For readers looking to delve deeper into Estée Lauder’s financials and future prospects, InvestingPro offers additional insights and metrics. Readers can also benefit from an exclusive offer by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
As Estée Lauder integrates DECIEM's innovative brands into its portfolio, these financial indicators and InvestingPro Tips will be invaluable for investors tracking the company's performance post-acquisition. For those interested, there are 13 additional InvestingPro Tips available, which can provide a more comprehensive understanding of Estée Lauder's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.