Yellow Wood Partners, a Boston-based private equity firm, has announced its acquisition of ChapStick, the iconic lip balm brand, for a staggering $430 million. The purchase is part of Yellow Wood’s strategy to expand its consumer brand portfolio, further solidifying its presence in the market.
ChapStick, which has been around since the 1880s, boasts the highest brand awareness and strongest purchase conversion among all lip care brands. This acquisition aligns with Yellow Wood’s vision of nurturing and growing renowned brands. The transaction is expected to be completed in the first half of 2024.
Haleon, the consumer health company that previously owned ChapStick, reported that the brand generated an impressive $112 million in revenue in 2023. Brian McNamara, CEO of Haleon, explained the decision to sell, stating that while ChapStick is beloved by consumers worldwide, it is not a core focus for their business. By divesting the brand, Haleon aims to simplify its operations and expedite debt reduction, while remaining confident that ChapStick will thrive under its new ownership.
This acquisition marks Yellow Wood’s fifth corporate carveout transaction in the past four years, showcasing their expertise in transforming brands for their next stage of growth. The private equity firm has been actively expanding its portfolio, including a recent acquisition of Unilever’s Elida portfolio, which encompasses well-known household brands such as Q-tips, Caress, Timotei, and Tigi.
ChapStick will join Yellow Wood’s Suave Brands division, further strengthening the company’s personal care offerings. As part of the deal, Haleon will retain a passive minority interest valued at $80 million in the Suave Brands Company. The establishment of Suave Brands Company in 2023 allowed Yellow Wood to acquire the Suave brand from Unilever and set the stage for future growth in the personal care sector.
Daniel Alter, CEO of Suave Brands, emphasized that this acquisition is not the end of Yellow Wood’s expansion plans. The company intends to continue building its portfolio by identifying and acquiring additional personal care brands that complement its existing lineup.
Yellow Wood’s diverse consumer brand portfolio already includes renowned names such as Dr. Scholl’s, Real Techniques, Byoma, and self-tanning brands like Isle of Paradise, Tanologist, and TanLuxe. The firm’s previous success includes the establishment of a multibrand personal care business in PDC, which was later sold to CVC Capital Partners in 2017.
