Dive Brief:
- Nail care brand Olive & June has entered into an agreement with Helen of Troy to be acquired for $240 million, which includes a $15 million earnout “subject to performance over three years.”
- Helen of Troy said it intends to operate Olive & June as a stand-alone business, while retaining the brand’s management team, including founder and CEO Sarah Gibson Tuttle, according to a Thursday press release.
- The deal is expected to close before the end of the year, subject to customary closing conditions.
Dive Insight:
The idea behind Olive & June came about when Tuttle moved out West, after leaving her job in finance, and couldn’t find an adequate nail salon.
The brand in 2013 opened its first nail salon, in Beverly Hills, California. The brand in 2019, though, began focusing on the at-home nail care market. It launched the Mani System, which features several products, including nail polishes, polish remover, cuticle serum, nail clippers and a Poppy — a patented product designed to go on top of nail polish bottles to make “painting your own nails easier, faster, and better than ever.”
When salons were forced to close early in the pandemic, including Olive & June’s, the brand was able to capitalize on consumers seeking out at-home alternatives. In 2020, the brand’s website traffic grew 234.2%, while it notched an average of 332,400 visits per month in the second half of the year, according to data from SimilarWeb. Aside from its DTC business, the brand has inked deals over the years to sell its products in retailers like Target, Walgreens and Walmart.
Olive & June has also expanded its product assortment over the years, launching press-on nail products and, most recently, gel polishes.
For Helen of Troy, the acquisition is expected to be “immediately accretive” to its revenue growth rate, gross profit margin, adjusted EBITDA margin, adjusted diluted earnings per share growth rate and free cash flow conversion. Olive & June is expected to achieve net sales revenue of about $92 million in 2024, according to a presentation on the acquisition.
Olive & June marks the first nail care brand in Helen of Troy’s portfolio, which also includes OXO, Hydro Flask, Drybar, Osprey, Vicks and others.
In Helen of Troy’s most-recent quarter, net sales revenue fell 3.5% year over year to $474.2 million. Profits fell during the period, with operating income falling 25.6% to $34.9 million and net income dropping 37.9% to $17 million. Within the beauty and wellness segment, net sales revenue fell 7.7% year over year to $232.3 million driven by a drop in sales of hair appliances, air purifiers, humidifiers and water filtration products.
