E.l.f. Beauty is tapping into the fast-growing clean beauty segment with the acquisition of plant-powered cosmetics line, W3LL People, for the price of $27 million. E.l.f. said it plans to leverage its marketing, customer relationships and operational capabilities to drive growth for the W3LL People brand, which is expected to contribute approximately $7 million in net sales and $0.01 to its adjusted earnings per share on a fully diluted basis in fiscal 2021.
“We have been observing this consumer trend for some time. In fact, over the past 6 years at e.l.f., we’ve reformulated our products to move away from parabens, phthalates and other ingredients that consumers do not want to see in their cosmetics and skin care. The acquisition of W3LL People dramatically advanced our capabilities in clean beauty and gives us a brand that is both a real authority in the segment and has major white space,” said Tarang Amin, e.l.f. Beauty Chairman and Chief Executive Officer.
“We have been transparent about our desire to pursue strategic extensions that can leverage our strengths and bring new capabilities to e.l.f., and we have been disciplined in this process,” he continued. “We believe that W3LL People’s 12 years of clean beauty experience and high-quality product line, in combination with e.l.f.’s multiple strengths from operations to marketing, will be attractive to our retail partners – including Target, our longest-standing customer.”
W3LL People was founded in 2008 by James Walker, Shirley Pinkson and Dr. Renee Snyder with the goal of providing high-quality, clean cosmetics using natural and organic ingredients. The brand is currently has 81 SKUs and is available at national retailers including Target and Whole Foods; natural specialty retailers such as Credo Beauty and The Detox Market; and online through Amazon.com, Ulta.com and w3llpeople.com. The three founders will be joining e.l.f. as part of the acquisition, but the brand’s current 30-person team will be evaluated over the coming months.
“Today is day one of our integration so over the next week or so we will be getting to know each of the rest of their employees from a retailer/sales coverage standpoint,” said Tarang. “There are some places where there isn’t overlap, but the approach we are going to use is to go through person by person and capability by capability, and decide what we need as we go forward. We obviously have significant resources at e.l.f. and we’re looking forward to getting to know more of their team. We will report on that in future quarters in terms of how we’re progressing on both the integration as well as the synergies.”