Information on the Target

Invincible Brands is a pioneering cosmetics group known for its innovative approach in the beauty sector. It offers a portfolio of three fast-growing premium direct-to-consumer (D2C) brands: HelloBody, Banana Beauty, and Mermaid+Me. These brands focus on sustainable and clean beauty products, catering primarily to the European market. HelloBody specializes in skin, body, and hair care, Mermaid+Me focuses on hair care solutions, while Banana Beauty offers decorative cosmetics like lipsticks and eyeliners.

In the twelve months leading up to June 2020, Invincible Brands reported total sales of approximately 100 million euros and employed around 180 personnel, including a seasoned incubator team recognized for successfully launching new D2C brands.

Industry Overview in Germany

The beauty care industry in Germany has shown robust growth, buoyed by a rising consumer demand for premium, sustainable products. German consumers are increasingly inclined towards clean beauty, a trend that emphasizes ethical sourcing and eco-friendly practices. As a result, brands that align with these values are becoming increasingly popular, creating significant opportunities for growth in this market.

Moreover, the D2C model has gained traction, as companies leverage digital platforms to reach consumers directly. This shift has enabled brands to maintain control over their narrative and engage with customers in a more personal manner. Brands like Invincible are at the forefront of this shift, utilizing innovative marketing strategies to capture market share.

The COVID-19 pandemic has further accelerated the shift towards online shopping, leading to a surge in demand for cosmetics that cater to at-home skincare needs. Consumers are prioritizing brands that offer convenience, quality, and sustainability, propelling ones like Invincible Brands to new heights.

The competitive landscape in the German beauty sector is comprised of both established players and emerging brands, all vying for the consumer's attention. This competition fosters innovation and encourages brands to continuously adapt to consumer preferences, further enhancing the growth of the industry.

The Rationale Behind the Deal

This transaction allows capital D to realize a portion of its investment in Invincible Brands while continuing to support its long-term growth strategy. By selling a 75% stake to Henkel, capital D is positioning itself to maintain an active role within the business, working alongside Henkel and the founders to drive further expansion and value creation.

Henkel's acquisition underscores the strengths of Invincible Brands’ business model and its potential within the beauty care segment. It provides capital D with an opportunity to validate its investment strategy, demonstrating its capability in identifying and nurturing disruptive businesses.

Information about the Investor

capital D is a next-generation private equity fund focused on investing in disruptive mid-market businesses across Europe. This investment firm prides itself on its expertise in recognizing innovative opportunities and nurturing companies to realize their full potential. With a commitment to long-term growth, capital D has established a reputation for fostering leading brands in competitive markets.

The firm’s active involvement with portfolio companies, particularly in enhancing brand value and diversifying marketing strategies, positions it as a key player in the European investment landscape.

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This transaction marks a significant milestone for capital D, being its first exit from the next-generation fund. The move to sell a majority stake in Invincible Brands to a major FMCG player like Henkel presents a strategic opportunity to enhance the brand's market reach while also realizing returns on investment. Given the increasing demand for premium and sustainable beauty products, this deal aligns well with current market trends.

The collaboration with Henkel will provide Invincible Brands access to extensive resources, including advanced research and development, strong market presence, and expertise in digital marketing, which are essential for future growth. The combined strengths of both entities suggest positive prospects for the brand's evolution.

Overall, this investment appears to be a well-calculated decision that not only offers immediate financial returns for capital D but also positions Invincible Brands for sustained success in a competitive industry. The strategic alignment between capital D, Henkel, and the founders indicates a commitment to long-term value creation.

In conclusion, as the beauty industry continues to evolve, capital D’s position alongside Henkel and the original founders of Invincible Brands places it in a strong position to capitalize on growth opportunities while continuing to innovate in a rapidly changing market.

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