Helen of Troy Limited (HELE), parent of the Hydro Flask, Osprey Packs and OXO businesses, has entered into a definitive merger agreement to acquire the business of Olive & June, LLC.
Olive & June, founded in 2013, is an innovative, omni-channel nail care brand trailblazing the DIY nail revolution.
“Within the multi-billion-dollar beauty industry, Olive & June plays across all nail care categories: polish, artificial, tools, treatment, and care, delivering a salon-quality experience at home. Its consumer solutions-driven product innovation and digital-first model to engage and educate consumers drives brand loyalty and social media engagement well above the category averages,” the company said in a media release.
Helen of Troy said the Olive & June acquisition is an excellent, complementary fit with Helen of Troy’s strategic goal of Continuing Better Together M&A.
“Helen of Troy believes it can add value to Olive & June and use its scalable operating platform, while Olive & June can accelerate profitable growth for Helen of Troy by helping to further diversify its product offerings,” the company said. “As the company continues to focus on elevating the health and performance of its core brand portfolio, it intends for Olive & June to operate in a stand-alone but supported model, with the brand continuing to operate largely as it is operated today except in areas where the company believes it can accelerate Olive & June’s momentum.”
The total purchase consideration is expected to be $225 million in cash at closing, subject to certain customary closing adjustments, and a $15 million earn-out subject to performance over three years. The total purchase price implies a multiple of less than 11x estimated calendar year 2025 adjusted EBITDA before synergies, which compares favorably to the company’s recent transactions. The company expects Olive & June’s calendar year 2024 net sales revenue to be approximately $92 million.
The company said the acquisition is expected to be immediately accretive to Helen of Troy’s revenue growth rate, gross profit margin, adjusted EBITDA margin, adjusted diluted EPS growth rate and free cash flow conversion. HELE expects its pro forma net leverage ratio to be 3x or less at the estimated time of closing. In September 2024, the company executed interest rate swaps on an additional $250 million of notional value with respect to its outstanding variable rate debt.
The additional swaps fix the interest rate for the additional notional value at an average SOFR rate of 3.7 percent compared to current 30-day SOFR of 4.6 percent for an average period of 18 months from the date of execution. As of November 20, 2024, approximately 71 percent of the company’s total debt is fixed at an average SOFR rate of 3.9 percent through February 2026.
“We could not be more excited to add Olive & June to our portfolio of leading brands and we welcome its passionate associates and visionary leadership team to the Helen of Troy family,” offered Noel Geoffroy, CEO, Helen of Troy Limited. “We believe Olive & June is an excellent fit with Helen of Troy both strategically and financially. Olive & June’s innovation-driven performance, highly relevant vision of democratizing nail care for everyone, award-winning products and unique consumer engagement model are impressive and inspiring. We see significant opportunities to build on its strengths in consumer obsession and breakthrough commercial and product innovation, in addition to helping expand the brand’s availability with increased distribution. Olive & June complements our existing Beauty portfolio and broadens us beyond the Hair category, adding a consumables business that is both high growth and high margin. We look forward to working together to fully realize the potential of Olive & June.”
Sarah Gibson Tuttle, founder and CEO, Olive & June, added her take on the tie-up, stating, “When I started Olive & June, the mission was simple: to make salon-quality nails accessible to everyone, everywhere. Thanks to our passionate team and loyal community, we have achieved incredible milestones—teaching millions how to do their nails at home and redefining what is possible in Beauty. Now, as we join the Helen of Troy family, a company known for elevating everyday experiences with innovative consumer products, I could not be more thrilled to lead this next chapter of growth for the brand. I have been deeply impressed by Noel’s visionary leadership and look forward to partnering with her and the entire Helen of Troy team. Together, we will continue to innovate, inspire, and deliver on our promise to be the go-to at-home nail solution for everyone, everywhere. I cannot wait to see all that we will accomplish together.”
The acquisition is expected to close before calendar year end 2024, subject to customary closing conditions, including regulatory approvals.
Image courtesy Olive & June
