Suave Brands Company successfully completes acquisition of #1 lip care brand ChapStick

05-Jun-2024 - Last updated on 05-Jun-2024 at 07:37 GMT

"As we continue to build Suave Brands Company as the top independent North American beauty & personal care company by combining the agility of a start-up with the power of market leading brands, the addition of ChapStick is a perfect fit that augments our strategy,” said Suave Brands Chief Executive Officer, Daniel Alter. © Sinhyu Getty Images

The $430 million deal gives Suave Brands Company control of ChapStick, which 'has the highest brand awareness in lip care, as well as the strongest purchase conversion among all brands in the category.'

Suave Brands Company (Suave Brands), a portfolio company of Boston-based private equity firm Yellow Wood Partners LLC and leading personal care brand announced the completion of its acquisition of the Chapstick brand from Haleon, the company confirmed this week. Suave Brands was established last year following its acquisition by Yellow Wood Partners from Unilever, and ChapStick is ranked #1 brand by volume in the lip care category.

As previously disclosed by Haleon, Suave Brands purchased ChapStick for “pre-tax cash proceeds of approximately $430 million, as well as a passive minority interest in Suave Brands Company.”

Commentary regarding the acquisition

The acquisition was first announced in January of this year. At that time, Dana Schmaltz, Partner at Yellow Wood Partners, commented in a press statement that “ChapStick will benefit from Suave Brands Company's leadership, setting the brand up for continued innovation and growth driven by increased consumer marketing investments, as well as a more focused sales approach,” and further stated, “we look forward to completing this transaction in the first half of 2024."

In the same January statement Tad Yanagi, Partner at Yellow Wood Partners, added, "ChapStick will be Yellow Wood's fifth corporate carveout transaction in the past four years.” He also shared that “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,” and that “we appreciate Haleon's collaboration on all levels and look forward to working with them to complete the carveout expeditiously."

Looking ahead

Following the completion of the acquisition, Schmaltz shared in a statement this week that Yellow Wood Partners and Suave Brands have now expanded Suave’s capabilities and portfolio of products.

Added Yanagi: "Over the past several months, we have worked with Haleon and ChapStick management to seamlessly integrate the brand into the Suave Brands Company's sales presence, operational footprint and marketing organization,” and “with the completion of this acquisition, Suave Brands Company's annual retail sales now reach ~$800 million.”

Suave Brands Chief Executive Officer, Daniel Alter, also provided a statement regarding the completed acquisition. "As we continue to build Suave Brands Company as the top independent North American beauty & personal care company by combining the agility of a start-up with the power of market leading brands, the addition of ChapStick is a perfect fit that augments our strategy,” he said.

He further remarked that “this transaction is a great example of Suave Brands Company's disciplined approach to value-creating acquisitions and our larger growth strategy” moving forward.