The deal for Drunk Elephant Holdings LLC won’t have a significant impact on full-year earnings, Shiseido said in a statement Tuesday. It will be financed with a combination of cash and credit, and is expected to close by the end of the year.

Shiseido is acquiring a brand beloved by hip millennial and Generation Z consumers for its nontoxic ingredients and Instagram-friendly packaging, as the Japanese company attempts to bolster its presence among younger shoppers.

The world’s largest cosmetics companies have been rapidly acquiring upstart brands in recent years as they search for the next big hit. Last year, Shiseido redesigned its eponymous makeup line to appeal to younger generations.

Read also: L'Oréal Paris is set to launch Karl Lagerfeld makeup

The Drunk Elephant deal will add to Shiseido’s “prestige” skincare portfolio, which has been a key source of growth for the company in recent years as consumers show a willingness to spend on higher-priced beauty products.

 

 

 

 

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So…some great news! I’ve decided to partner with Shiseido. I couldn’t be more excited that we’ve found someone who respects my vision and the brand identity and is willing to let us stay who we are. Shiseido is a really beautiful company with a beautiful culture. I know what you’re wondering because I am a consumer and I always think/wonder the same things when brands I love are acquired. I want to reassure you. The formulations won’t be changing. I’ll remain in my same role. My same incredible and lovable entire team will stay with me. If it wasn’t announced, you wouldn’t be able to tell the difference; that’s our main goal. Our prices will not be increased. And, we’ll remain cruelty-free. I wouldn’t have signed on for this unless both parties could agree. Fortunately, we wanted the same things; we share like values. I feel so honored to join this global powerhouse. The best part in my opinion is that we’ll be able to act more quickly to accomplish a few things that you all have told us are very important to you and are also important to us: 1. Attain sustainability across the brand. 2. Get to the markets who have been requesting the products. 3. Share our philosophy in a louder way, spreading awareness so that we can hopefully help more people reconnect with their skin all over the world. 4. Ignite our anti-bullying campaign on a bigger stage. We are feeling excited and positive and a little overwhelmed (in a great way)! As always feel free to ask any questions you may have or share any concerns. 💚 Finally, we’d like to celebrate by sending out a cozy token of our gratitude to some of our followers. This community has been the most loving, kind, supportive, inquisitive and lovely community I could ever have dreamt of and I will be forever grateful! Please share below something you’ve loved about Drunk Elephant, and that you agree should never change! We’ll choose 100 and notify you on the DM. With love and gratitude 💚💚💚TM

A post shared by Drunk Elephant (@drunkelephant) on Oct 7, 2019 at 11:36pm PDT

Drunk Elephant was founded in 2012 by Tiffany Masterson and is known for its products with nontoxic ingredients that make use of acids. The company is profitable and on track to have more than $100 million in sales in 2019, according to Shiseido.

Jefferies LLC was financial adviser to Shiseido, while Financo and Moelis & Co were financial advisers to Drunk Elephant in the deal.

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