The Strategist

Unilever is planning to buy Jessica Alba's company

09/16/2016 - 14:38

Unilever is in talks about purchase of a manufacturer of environmentally friendly cleaning products. The parties are discussing a sum of more than $ 1 billion, which is significantly less than last valuation of the company.

Sean Biehle
Sean Biehle
Unilever, owns Dove and Domestos, is in talks to acquire Honest Co., founded by actress Jessica Alba. The company produces eco-friendly diapers and hygiene products, writes The Wall Street Journal, citing sources.

According to interlocutors of the newspaper, Unilever is discussing a deal worth more than $ 1 billion. Negotiations are at an early stage, and one of the sources said that Honest does not exclude a possibility of holding an IPO.

Honest was founded in 2011. It produces more than 100 products, including hypoallergenic laundry detergents and household cleaners, baby diapers, personal hygiene and beauty products. Honest sells products through a website and retailers, including Target and Whole Foods Markets.

According to The Wall Street Journal, Honest has attracted more than $ 200 million during its excistence. At the same time, the company pledged to some investors that return on their investment would double in case of sale of the business. In 2015, Honest was valued at $ 1.7 billion. According to one of the newspaper’s sources, the company earns about $ 300 million a year.

Founder of the company, actress Jessica Alba, in 2016 for the first time entered Forbes’ ranking of richest women in the United States, who made their fortune by themselves. Alba took 42th place in the list. Her capital is estimated at $ 340 million.

Acquisition of Honest will allow Unilever to gain a foothold in the rapidly growing market of environmentally friendly cleaning products and hygiene items. Besides, the company will give Unilever a deeper understanding of consumer behavior, writes The Wall Street Journal. Unilever sells detergents and hygiene products throughout the world, but does not compete with Honest on the US market. In 2008, the company sold its North American business for production of washing powder for $ 1.45 billion.

Honest is trying to compete with such giants as Procter & Gamble and Clorox. The company promises to provide consumers with detergents without aggressive chemicals, the newspaper said. In March, The Wall Street Journal conducted an investigation, and results of laboratory tests said that Honest’s statements about absence of sodium lauryl sulfate (SLS) in its detergents are untrue. Honest did not agree with this, stating that the company’s own laboratory tests have not confirmed presence of SLS in the products.

Earlier in September, S&P Dow Jones Indices and investment company Robeco SAM once again published their annual Sustainability Index Dow UNEG.

Unilever not only re-entered the list of companies that pay special attention to sustainable development of the business, but also kept leading the ranking. The Anglo-Dutch maker of consumer goods has become a leading manufacturer of household chemical goods and cosmetic products, operating on principles of sustainable development throughout the world. Previously, Unilever has been a leader in the segment of food products and beverages for over 15 years.