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New suitors circle beauty brand Aesop

Mar 20, 2023
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Illustration: Tiffany Herring/Axios

Permira, KKR and Famille C Participations, Clarins SAS' investment vehicle, join a long list of suitors vying for a piece of beauty brand Aesop, Bloomberg reports.

Why it matters: Despite weaker consumer spending and inflationary pressures, the beauty and wellness segment has been resilient.

Catch up fast: L’Oreal, LVMH and Japanese beauty group Shiseido were previously reported to be considering a bid earlier this year.

  • CVC Capital and L’Occitane International were among the other bidders, per Bloomberg.

Flashback: Late last year, Aesop parent Natura & Co. said it was looking for ways to unlock value in Aesop, and considered a possible IPO or spinoff, but opted to go for a minority stake sale due to unfavorable capital markets.

  • Bank of America and Morgan Stanley have been working with the company since last year.
  • The deal could value the Australian beauty brand at more than $2 billion.
  • Natura acquired a majority stake in Aesop for AUD $68 million in 2012.

The intrigue: An Aesop stake sale could improve the company’s financial position, S&P Global Ratings said in a report.

  • Though the parent company posted higher-than-expected leverage metrics (a debt-to-EBITDA ratio of 4.7x at the end of 2022, compared with the agency’s forecast of 4x), S&P says its ratings on Natura & Co remain unchanged.
  • “This is because of a potential near-term sale of its subsidiary Aesop that the company announced that it is seeking in fourth quarter 2022, which could significantly reduce leverage,” the agency says, adding the company has made some progress toward improving cash flow and reducing expenses.

Natura, L’Oreal, Permira and Famille C Participations didn’t immediately respond to comment. KKR declined to comment.

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