Unilever Plc has enlisted the services of investment banking firms Morgan Stanley and Evercore Inc to initiate the sale of a collection of non-core beauty and personal care brands, among them Q-Tips and Impulse. This marks a revival of their previous attempt, which was shelved two years ago, as reported by individuals familiar with the situation.
The resurgence of the sales initiative, undisclosed until now, marks the inaugural significant action by Hein Schumacher, who assumed the role of Unilever’s CEO in July. His primary objective is to streamline the company’s operations as it navigates the challenges posed by inflation.
The brand collection, identified as Elida Beauty, encompasses a range that features Caress, TIGI, Timotei, Monsavon, St. Ives, Zwitsal, Ponds, Brut, Moussel, Alberto Balsam, and Matey. Sources indicate that Elida Beauty recorded approximately $760 million in revenue during the year 2022.
In 2021, Unilever collaborated with Credit Suisse to initiate the divestiture of Elida. However, later that same year, they halted the process. This decision came about because other consumer companies selectively picked certain brands for sale, resulting in offers that fell short of Unilever’s anticipated valuation, as per insider sources.
Subsequently, Unilever has undertaken efforts to transform Elida into a self-sustaining entity, one that could potentially attract the interest of private equity firms as a whole, sources disclosed. In this regard, Morgan Stanley and Evercore have reached out to various parties to assess their interest in acquiring Elida, a deal that could potentially be valued in the billions, according to the sources.
The individuals familiar with the matter chose to remain anonymous due to the sensitive nature of the information. Unilever, Morgan Stanley, and Evercore have opted not to provide any comments on the subject.
For approximately two years, the consumer goods sector has grappled with escalating expenses, spanning items such as sunflower oil, shipping, packaging, and grains, all of which have seen rising costs. In response to these challenges, Unilever, renowned for products like Dove soap and Ben & Jerry’s ice cream, is reassessing its collection of non-core assets that could be divested to generate additional funds.
In the second quarter, Unilever exceeded expectations for underlying sales growth by implementing price increases to counteract elevated costs. Additionally, the company has contemplated the potential sale of certain U.S. ice cream brands, which may include Klondike and Breyers.