Hollywood celebrity Jessica Alba co-founded the Honest Company in 2011 along with Brian Lee. In recent weeks, this company has become a highly anticipated acquisition target. Among all the other companies interested in this deal, reports suggest that Unilever might close in the deal. Though nothing has been confirmed yet, Honest might also refuse the deal.
Honest is a consumer packaged-goods company which focuses on green or organic products. It sells disposable baby diapers, household cleaner, personal care and beauty products on its official website. Gradually, it has gained immense popularity among young mothers. Majority of its consumers buy products directly from the website on monthly subscription basis. Selected products are also available on brick-and-mortar retailers like Target Corp. and Whole Foods Market Inc. The company headquarter is in Santa Monica, California and has 200 employees under its wing.
Market Value of the Honest-Unilever Deal
Unilever and Honest both have not commented on this matter. The exact price of the Honest-Unilever Deal is not official but sources claim that the deal will close at more than $1 billion. This amount is significantly below the estimated market value which is around $1.7 billion. Despite this, Honest is showing keen interest in finalizing the deal with Unilever. Unilever is the maker of Dove soaps and Axe sprays, and it aims in expanding the beauty products department of Honest. Unilever also bought Dollar Shave Club in July, 2016 for $1 billion. According to rumours, Unilever plans on expanding its business sticking to the strategies of various start-ups. Unilever is popular for its sale of packaged food, household and personal-care products globally. Thus, Honest products will help it expand the assortment of products it can offer.
Honest Company and its selling factors
The Honest Company has raised around $200 million from various investors. According to market reports, Honest generates around $300 million in sales. This company is popular for its organic products which is its major selling factor. The uniqueness of products it has in store for the customers increases its appeal. In fact, this tempts the consumer to try out the product which is beneficial for the company. The Honest Company has taken a pledge that if the sale of the company takes place, it will pay some investors double their investment as compensation. Unilever decided to invest in Honest as it feels that the natural products offered here will definitely increase its market value. Another factor behind the Honest-Unilever Deal is that demand for online products is on the rise which is how Honest works. This apparently shows that Unilever is planning to expand its business through different mediums.
Kerri Walsh Jennings and Jessica Alba sit down to discuss their partnership.
How honest is the Honest Company?
Earlier this year, there were multiple lawsuits against the Honest Company. The issue behind these lawsuits was that supposedly the use of chemicals in product manufacture. The trouble took place as Honest claims to produce only organic and green products. Regarding this matter, co-founder Jessica Alba had commented that these allegations were baseless as it’s an easy target. Despite all this, there has been no judgement on this matter yet.