On February 23, 2021, The Estée Lauder Companies Inc. (NYSE: EL) ("ELC") announced that it had entered into an agreement to increase its investment in DECIEM Beauty Group Inc. ("DECIEM") from approximately 29% to approximately 76% (the "First Phase"). The transaction is expected to close in the quarter ending June 30, 2021. ELC has agreed to purchase the remaining interests after a three-year period (the "Second Phase").
Known as "The Abnormal Beauty Company", DECIEM is an industry disruptor with a consumer-focused approach and is a Canadian-based, vertically integrated multi-brand company. It was founded in 2013 by the late Brandon Truaxe, a visionary who set out to change the beauty industry through authenticity and transparency. DECIEM's portfolio currently encompasses six brands, including The Ordinary, an internationally popular skin care brand with impressive community- and referral-driven buzz reflecting a deep connection with its global consumer base of skin care devotees. DECIEM's range of "functional beauty" brands and products are sold primarily through DECIEM-owned and retailer e-commerce sites and specialty-multi stores, as well as its own freestanding stores, primarily in the United States, United Kingdom and Canada.
Since ELC's initial investment in June 2017, DECIEM has grown rapidly, achieving net sales for the 12 months ended January 31, 2021, of approximately US$460 million. The amount to be paid by ELC at closing is approximately US$1.0 billion, reflecting a total enterprise value of approximately US$2.2 billion for the First Phase. The purchase price for the remaining interest in the Second Phase will be determined based on the future performance of DECIEM.
Gowling WLG was co-counsel to DECIEM in the negotiation of this agreement, representing its operational interests, with a team led by Cara Stoller (corporate/M&A) and that included Eric Macramalla (IP - trade-marks), Erin Farrell (regulatory), Laura Gomez (regulatory), JP Powers (regulatory), Selena Kim (IP - patents), Paul Carenza (tax), Jodey Therriault (real estate), Ian Macdonald (competition), René Bissonnette (advertising), Aliana Dhanani (corporate) and Quinn Clement-Schlimm (corporate).