THG buys skincare brand at bankruptcy auction
THG has acquired an American skincare brand for US$20 million in a competitive auction run by the bankruptcy court of the US state of Delaware.
Founded in 2015 Biossance is stocked in over 1,600 stores globally including Sephora, Harrods, Space NK, Douglas and Selfridges plus online, but is part of US biotechnology group Amyris which recently commenced voluntary Chapter 11 bankruptcy protection proceedings.
THG was declared the successful bidder for assets including IP, plus inventory and debtors with a book value of $29m.
THG informed the stock market this morning that the deal is expected to complete in mid-December, with integration completing in Q1 2024.
Matthew Moulding, chief executive of THG, said: “The technology-led, clean chemistry formulations resonate with consumers globally, evidenced by a strong performance on our own retail sites.
“We have significant experience in prestige skincare as an innovator and manufacturer, and through our own brand portfolio including Perricone MD and ESPA. We’re incredibly fortunate and excited to secure this opportunity to work with the Biossance team and further build on the brand’s strong awareness across the US.
“The fit within THG is perfect, with Biossance already generating c. $2 million in revenue across our retail sites in the past 12 months. Integration on to the Ingenuity platform will commence as soon as the deal is finalised.”
As a sideshow to the deal Moulding has provided a typically spiky yet upbeat commentary on his LinkedIn feed.
With a swipe at his perceived legions of critics he says: “Anyone reading THG’s media coverage from a few blatantly dubious characters, could be forgiven for thinking THG might be one of them. Maybe they had a “Christmas drink” riding on it? Well, they may now be tucking into a smaller turkey this year instead.
“Not only is THG still here, but we’ve grown stronger and had some good fun in 2023. And now we’ve managed to squeeze another piece of exciting news in before year end.”
But he also adds some fascinating insights into the US cosmetics sector and the dynamics of the deal, which particularly favour THG.
“Usually, there’d be a queue of buyers for a brand like Biossance – a large, premium, clean chemistry brand, with sustainability at its core. Over 50% of sales are generated from Biossance’s own website, and it has a major US store agreement with SEPHORA.
“But buyer interest was minimal. The only other serious bidder was a US PE firm.”
According to court documents this was an entity called Ayala Cove Bidco LLC.
Moulding believes THG had the edge because of the route to market for Biossance products that THG possesses with its Ingenuity ecommerce engine.
“Biossance should be immediately breakeven in THG. Our US and UK labs will support with manufacturing, and THG Ingenuity immediately brings both a new global website and distribution.”
