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BFD Expert Voices - Retail Deals

BFD Expert Voices

Orveon Global CEO Pascal Houdayer has helped elevate Laura Mercier, Buxom and BareMinerals in his two years on the job —  and he's ready to take the company into the next phase, he tells Axios.

Why it matters: A vet of Procter & Gamble, Henkels and L'Oréal, Houdayer's next frontier for Advent International-backed Orveon is skin care.

Advent International formed Orveon in 2021 after acquiring the three beauty brands from Shiseido.

Why we chose the restaurant: As part of our 1 big meal series, we ate at the storied Gallaghers Steakhouse in midtown Manhattan — where Houdayer took Orveon's executive committee when he was to bring them aboard.

What we ate: Houdayer had a filet mignon paired with a glass of house red. Kimberly had the New York bone-in steak (cooked to perfection) and a mocktail. We shared a gorgonzola salad and a side of sautéed spinach and mashed potatoes.

This interview was edited for clarity, style and length.

"Why was I attracted particularly to these three brands? Because these three brands are unique, and they don't cannibalize each other.

One unique feature is pricing. These three brands have a different pricing strategy. Buxom is a masstige brand. BareMinerals is a premium brand. Laura Mercier is a prestige brand. We're not in luxury.

These three brands are totally complementary from a quality portfolio standpoint, Vertically in pricing, horizontally in positioning. And that's why I love them."

"We are, with BareMinerals and Laura Mercier, the market leader in the U.S. in foundation.

But I'm not good on the first part [of people's makeup routine], which is cleaning. And I'm not good on the protection and treatment.

My strategy is twofold. One, take my current brands and stretch them from their core to adjacent categories. BareMinerals, I'm going to launch in 2024 a skin care line of serums.

But I also need to have a skin care brand and I'm not in skin care. So I'm working on two buildups of buying two premium skin care brands.

One, more in the natural ingredients part. Indie brand, L.A.-based, California-based. The second one, they are dermo cosmetic-based, clinical, like La Roche Posay, Bioderma, Avene. The French brands are the leader in dermo cosmetic.

And these two brands are totally complementary. So that's the vision. I'm currently working on due diligence. And that's the way we're going to be, a collective of five brands, not more. Three makeup brands, two skin care brands, so that we are the sustainable face care expert."

What does timing look like for those acquisitions?

"I see an acceleration in the second half of 23 of [sale] discussions. And I see a lot of brands telling me they're going to launch formal processes in Q1 24.

[Some of it is] because they're putting their act together. But you know, it's pretty slow. But if you set aside a few exceptional deals, which are out of the market, like Aesop, these are not normal deals.

In the real market of deals, there is [going to be] an acceleration in the second half of 23. I'm anticipating the first half of 24 to be quite buoyant because we talk to investment banks every day."

Does that mean that it'll be a more competitive market for those brands?

"We've been in many exclusive due diligence processes with brands. The problem is that a lot of founders have been rightly or wrongly advised by investment bankers that are telling them that the multiple from pre-COVID you can get post-COVID.

I looked at 65 targets over the past six months, I talked with 11 of them. And I was in due diligence with four of them. Two, I rejected and we didn't even meet at the end. Then they got no buyers because they were crazy in terms of multiples. And two we're discussing currently."

With indie brands and companies like Oddity entering the fray, does the beauty space feel more competitive?

"I'm gonna take a different twist to your question. I'm a firm believer that you need to externalize your R&D, your contract manufacturing, and value to people with different strategic goals.

Some contract manufacturers are very good at doing your best business, the big product. Some manufacturers are amazing at coming up with disruptive innovations and bringing you a molecule that nobody's using. Some of them are very good at copying a formula from competition, doing it fast, and cost-optimizing it.

I decided strategically to externalize 100% of my company's manufacturing but I keep our R&D inside. ...  I get the best of both worlds."

1 fun fact: Houdayer was an officer in the French Air Force, flying as a copilot on the Mirage F1, before joining L'Oréal.

1 big meal: Orveon Global’s Pascal Houdayer

The beauty veteran believes deals will pick up in the first half of next year.

a photo illustration of Pascal Houdayer on a picnic table print bsckground

Retail deals

Orveon Global CEO Pascal Houdayer has helped elevate Laura Mercier, Buxom and BareMinerals in his two years on the job — and he&#x27;s ready to take the company into the next phase, he tells Axios.Why it matters: A vet of Procter &amp; Gamble, Henkels and L&#x27;Oréal, Houdayer&#x27;s next frontier for Advent International-backed Orveon is skin care.

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1 big meal: Orveon Global’s Pascal Houdayer

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