ChapStick sold to Yellow Wood Partners for $510m

Boston-based private equity firm Yellow Wood Partners has announced the acquisition of the iconic lip balm brand, ChapStick. The deal was struck with its previous owner - consumer health company Haleon, marking another strategic addition to Yellow Wood's growing portfolio of consumer brands.

Transaction Snapshot

  • Deal Value: $510 million ($430 million in cash and a passive minority interest in Suave Brands valued at $80 million)
  • Deal Type: Acquisition
  • Buyer: Yellow Wood Partners

ChapStick, a brand with a rich history dating back to the 1880s, has been a household name in lip care. Despite its success and global consumer recognition, Haleon's CEO Brian McNamara stated that ChapStick was not a central focus for the company, prompting the sale to streamline operations and accelerate debt repayment. The strategic divestment is part of Haleon's ongoing portfolio management, aiming to concentrate on its core brands, including Sensodyne toothpaste, Panadol pain relief, and Centrum vitamins.

Yellow Wood Partners, on the other hand, has been on an acquisition spree, recently adding significant names like Unilever's Suave business in North America to its portfolio. The acquisition of ChapStick aligns with Yellow Wood's strategic focus on carving out and nurturing brands for their next growth phase. This transaction marks Yellow Wood's fifth major carveout deal in four years, demonstrating the firm's prowess and commitment to building a robust portfolio of consumer brands. The newly acquired ChapStick will join the Suave Brands division, a testament to Yellow Wood's vision of fostering synergies and growth across its brand platform.

In the backdrop of this acquisition, the beauty industry has witnessed a flurry of activity, with significant deals including the acquisition of RoC Skincare by Bridgepoint, Puig's majority stake in Dr. Barbara Sturm, and Shiseido's strategic acquisition of Dr. Dennis Gross Skincare. These moves underscore a dynamic market landscape, with key players strategically positioning themselves through acquisitions and brand development.

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