Estée Lauder Companies seizes remaining stake in The Ordinary parent company Deciem for US$860M

03 Jun 2024 --- The Estée Lauder Companies (ELC) takes over the Canadian multi-brand company Deciem Beauty Group, housing the beauty labels The Ordinary, Hylamide and NIOD (Non-Invasive Options in Dermal Science). ELC closed on the purchase of its remaining interests in the group on May 31 using cash on hand for an estimated US$860 million.

ELC first invested in Deciem in 2017, increasing its stake to become majority owner in 2021. After a three-year period, it recently exercised its option to purchase the remaining interests in Deciem.

The total investment, net of cash, approximated US$1.7 billion over the three tranches. In accordance with the agreement, these amounts are subject to post-closing adjustments.

“In our seven years of partnership, Deciem has achieved impressive growth while continuing its core mission of reimagining effective, high-quality skin care for today’s diverse and sophisticated consumers,” says Fabrizio Freda, president and CEO of ELC.

“As a digitally native organization with a highly engaged following among millennial and Gen Z consumers, Deciem helps to strategically expand our skin care portfolio, and we believe there are many more exciting growth opportunities ahead.”

The Deciem brand portfolio includes tech-led skin science brand NIOD (Image credit: NIOD).The Ordinary leads “Abnormal” portfolio
Known as “The Abnormal Beauty Company,” Deciem brings forward its brand incubation capabilities, complementing its portfolio of labels.

Deciem’s flagship brand, The Ordinary, reportedly ranked second in the top prestige skin care in its home markets of Canada and the US and fourth in France, Germany and the UK during the quarter ended March 31. 

The Ordinary is in ELC’s tier of scaling brands, each with net sales between US$500 million and US$1 billion. 

Over the last two years, enabled by ELC’s international expertise and network, The Ordinary has expanded its consumer reach globally with launches in key markets including India, the Middle East and South Africa.

Over the last three years, The Ordinary has increased innovation as a percentage of sales, driven by the launches of Multi-Peptide Lash and Brow Serum, Multi-Peptide Eye Serum and Soothing & Barrier Support Serum.

“Deciem is an exceptional company with authentic brands, highly effective must-have products, and a uniquely transparent and engaging relationship with its devoted consumers around the world,” says Stéphane de La Faverie, executive group president at ELC. 

“We have enjoyed a fantastic partnership over the last seven years, and we are thrilled to continue our journey together.”

Deciem brand family
In addition to The Ordinary, Deciem’s brand portfolio also includes NIOD, an innovator in “tech-led skin science,” and fragrance brand Avestan. 

Deciem’s headquarters are in Toronto, Canada, which also houses its five in-house labs. It is led by co-founder and CEO Nicola Kilner and Jesper Rasmussen, global SVP and general manager.

“Deciem is an exceptional company with authentic brands, highly effective must-have products, and a uniquely transparent and engaging relationship with its devoted consumers around the world,” says Stéphane de La Faverie, executive group president at ELC. 

“We have enjoyed a fantastic partnership over the last seven years, and we are thrilled to continue our journey together.”

In its third quarter of fiscal 2024, ended March, ELC attributed a 6% organic net sales increase to double-digit growth in Europe and the EMEA region, driven by stronger sales in Asia travel retail. The company reported net sales of US$3.94 billion in May, an increase of 5% from US$3.75 billion in the prior-year period.

By Benjamin Ferrer