HUL To acquire 90.5% Stake In Minimalist For Rs 2,955 Crore
The Minimalist team led by Mohit and Rahul will continue to run the business for a period of two years, as per investor presentation.
Hindustan Unilever Ltd. will acquire a 90.5% stake in Minimalist through secondary buyouts at a pre-money enterprise value of Rs 2,955 crore and primary infusion. The balance of 9.5% will be acquired from the founders in two years, as per the investor presentation on Wednesday.
The transaction is expected to close in the June quarter, the company said.
Earlier on Jan. 4, NDTV Profit reported that HUL is in advanced talks to acquire skincare brand Minimalist in a deal that could value the startup at about Rs 3,000 crore, according to people familiar with the matter.
Currently, Peak XV Partners, an investor, owns a 27% stake in Minimalist, while the remaining stake is owned by the founder brothers Rahul and Mohit Yadav. The Minimalist team, led by Mohit and Rahul, will continue to run the business for a period of two years, as per the investor presentation.
HUL and Minimalist team will partner to unlock value through synergies and complementary capabilities.
"In line with our business strategy, on an ongoing basis, we evaluate various strategic opportunities for growth and expansion of our business," an HUL spokesperson told NDTV Profit in an emailed response. "We will make appropriate disclosures whenever there is any material development that requires disclosure under applicable laws."
The deal, if it materialises, will rank among the largest deals in the skincare industry in recent years. Besides, it underscores the trend of consolidation among new-age brands—which often encounter difficulties in scaling beyond a certain point—being acquired by legacy FMCG companies.
Minimalist, however, stands out as a rare outlier. Founded in 2020, Minimalist sells a range of ingredient-based products, including sunscreen and serum. The Jaipur-based direct-to-consumer brand generated a revenue of Rs 350 crore in the financial year ending March 2024, an 86% jump over last year, according to Tracxn.
HUL announced its third-quarter earnings on Wednesday, where the company reported a rise of net profit 18.9% year-on-year, beating analysts' estimates.
The consolidated net profit of India's largest consumer goods maker rose to Rs 2,984 crore in the quarter-ended December, according to an exchange filing.
Shares of HUL closed 0.10% higher at Rs 2,342.95 apiece, compared to a 0.57% rise in the benchmark Nifty 50.
Twenty six out of the 43 analysts tracking the company have a 'buy' rating on the stock, 14 recommend a 'hold' and three suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 20.3%.
