Clariant officially acquires Lucas Meyer Cosmetics to boost cosmetic ingredients portfolio

03 Apr 2024 --- Clariant completes its acquisition of Lucas Meyer Cosmetics, a provider of “high-value” ingredients for the cosmetics and personal care industry, from International Flavors and Fragrances in a deal worth US$810 million.

“The acquisition of Lucas Meyer Cosmetics is a prime example of how we implement our purpose-led growth strategy and support our goal of accelerating customer- and sustainability-driven innovation,” says Conrad Keijzer, CEO at Clariant.

“The complementarity in customer portfolio, product portfolio and regional strongholds and capabilities in R&D and marketing make the combination of Clariant and Lucas Meyer Cosmetics a leading solutions provider for high-value personal care brands.”

Personal care chemical growth
Clariant has now consolidated Lucas Meyer Cosmetics into its Business Unit Care Chemicals. The specialty chemical company says this move “transforms Clariant’s portfolio toward high-growth, high-margin and highly cash-generative specialty chemicals businesses and consumer end-markets” amid increasing consumer demand for natural and sustainable products.

“I see the acquisition of Lucas Meyer Cosmetics as a significant step forward for Care Chemicals. Customers and consumers increasingly demand high-value natural ingredients,” expresses Christian Vang, president of Clariant’s Business Unit Care Chemicals and the Americas region.

“I extend a warm welcome to 190 highly qualified professionals as our new colleagues at Clariant. We jointly look forward to exciting growth opportunities and expect to increase annual sales to US$180 million in 2028 from around US$100 million currently.”

Clariant consolidated Lucas Meyer Cosmetics into its Business Unit Care Chemicals.With approximately 10% sales growth and high cash conversion, Lucas Meyer Cosmetics exceeds Clariant’s financial target metrics for 2025.

Financials of acquisition
The purchase price will be subject to customary net debt and working capital adjustments.

The acquisition was funded through the issuance in March 2024 of a CHF350 million (US$385.3 million) dual-tranche — CHF200 million (US$220.2 million) for three years at 2.375 % and CHF150 million (US$165 million) for seven years at 2.75 % — senior unsecured bond and through a multi-currency bridge facility at an interest rate of around 4.4 % per annum.

This sum will be refinanced in 2024, subject to market conditions. Clariant says it expects no change to its investment-grade credit rating after closing.

Acquisition news
In recent industry purchases, The Body Shop was sold to Aurelius in November and has since faced closures, employee layoffs and an excess of beauty ingredients, coupled with administration filing of its UK arm.

Additionally, private equity firm Pai Partners acquired a majority stake in Beautynova, a professional haircare platform, from Bluegem Capital Partners. The acquisition positioned Pai as the majority shareholder, while Bluegem retains a significant stake.

Edited by Sabine Waldeck

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