Information on the Target

Lumene Group, based in Espoo, Finland, specializes in the development and manufacturing of high-quality, sustainable skincare, makeup, and haircare products. The company operates under three prominent Nordic beauty brands: LUMENE, CUTRIN, and IDA WARG Beauty. These brands are distributed in 23 countries, and Lumene Group's online store services a global consumer base. Since the leadership of CEO Adrian Innergård commenced in 2023, the company has made significant strides toward expansion, highlighting a commitment to enhancing production capacity and refining its sales and marketing strategies with a strong focus on digital channels.

In 2024, Lumene Group reported net sales of €102 million, reflecting a growth rate of over 8% compared to the previous year, alongside an EBIT of approximately €8.3 million, excluding goodwill amortization. This growth trajectory positions Lumene Group as a key player in the Nordic beauty sector, ready to capitalize on its brand strength and operational enhancements to extend its market reach.

Industry Overview in Finland

The Finnish beauty industry is marked by a growing consumer preference for sustainable and eco-friendly products. With increasing awareness of environmental issues, consumers are increasingly favoring brands that prioritize sustainability. This trend has prompted companies in the sector to innovate continuously, aligning their product offerings with consumer values.

The industry has also seen a shift toward digital sales channels, accelerated by the global landscape's transformation due to the pandemic. Finnish beauty companies, including Lumene Group, are adapting to this changing environment by enhancing their e-commerce capabilities, reaching a broader audience, and engaging consumers through diverse online platforms. This transition is crucial for growth, especially for brands looking to expand their footprint beyond Nordic borders.

Additionally, the Finnish beauty sector benefits from its strong heritage of natural ingredients and holistic beauty perspectives, which resonate well with consumers both locally and internationally. The combination of innovation, sustainability, and a rich cultural heritage positions companies like Lumene Group favorably in the increasingly competitive global beauty market.

Furthermore, the Nordic region is becoming a global hub for beauty and wellness, attracting investments and partnerships focused on sustainability. This environment not only encourages local companies to innovate but also entices international investors seeking to tap into growing consumer demand for high-quality, environmentally conscious products.

The Rationale Behind the Deal

The strategic transaction sees Verdane partially realize its investment from Lumene Group while maintaining its majority ownership. This restructuring is aimed at positioning Lumene Group for accelerated growth and expansion, particularly as it seeks to consolidate its market position in the Nordic region and enter additional European markets. Verdane's experience in partnering with growth-oriented companies and its commitment to sustainability aligns well with Lumene Group's operational goals and market ambitions.

With Creades now joining as a prominent investor, the collaboration is expected to unleash further growth potential by leveraging Creades' extensive expertise and network. This partnership underscores a shared vision of capitalizing on the existing positive trends within the beauty industry, including heightened demand for sustainable products and the ongoing shift to digital commerce.

Information About the Investor

Verdane is a renowned growth buyout investment firm focused on tech-enabled and sustainable businesses that contribute to the decarbonization and digitalization of the European economy. With over €8 billion in assets under management, Verdane has a diverse portfolio including more than 200 investments in high-growth companies since its inception in 2003. Its operational team, consisting of over 150 investment professionals, utilizes deep market expertise and local networks to navigate core European markets effectively.

Verdane is not only distinguished by its investment strategy but also by its commitment to sustainability, holding a B Corporation certification. This status reflects Verdane's dedication to investing in businesses capable of thriving in a sustainable future, which is evident in its partnership with Lumene Group, a leader in sustainable beauty products.

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The partial realization of Verdane’s investment in Lumene Group, while retaining majority ownership, appears to be a promising move for all parties involved. The beauty industry's current trajectory towards sustainability and digitalization aligns well with the strategic objectives laid out by Lumene Group and supported by Verdane’s expertise in growth investments. Given the recent financial performance of Lumene and its proactive approach to market expansion, this investment presents a compelling opportunity for stakeholders.

Creades’ entry into the partnership further fortifies this outlook. With its wealth of experience and focus on companies poised for growth, Creades is well-positioned to amplify Lumene Group's operational capabilities and market reach. Their expertise will likely enhance Lumene's competitive stance, particularly in expanding its footprint across Europe.

Moreover, as the global market increasingly favors sustainable products, Lumene Group is strategically placed to leverage its established reputation and the growing demand for eco-friendly beauty solutions. The firm’s ambitious five-year strategy to double revenue signifies confidence in navigating the competitive landscape ahead.

In conclusion, this investment structure offers robust potential for Lumene Group, advocating for continued growth and market adaptation in a dynamic industry, while simultaneously presenting Verdane and Creades with a lucrative opportunity in the evolving beauty sector.

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