02.25.22
Revolution Beauty Group plc, the multi-brand, multi-category, and multi-channel mass beauty innovator with proven global scale, has completed the acquisition of certain intellectual property assets and inventory of the US-born cosmetics brand BH Cosmetics Holdings LLC for a consideration of $3.9 million.
The acquisition was financed through the Group's existing cash resources.
"BH Cosmetics is an iconic US-born brand with a loyal fan base across digital and social platforms and loved by celebs and make-up artists everywhere,” said Adam Minto, CEO. “As a cruelty-free vegan brand, BH aligns with our ethos. Its strong offering in color cosmetics and brushes, perfectly complements our business. Bringing BH Cosmetics into the Group will help us accelerate our growth trajectory in the US and leverage our existing global eco-system of distribution.”
He continued, “Like us, BH has a strong heritage as a challenger brand and has disrupted the traditional beauty market in the US through their innovation. We remain focused on building a British global beauty brand, capturing the vast market opportunity in mass beauty, and continuing to win customers around the world. We're confident the acquisition will deliver sustainable value for all our stakeholders over the long-term."
The acquisition enhances Revolution Beauty's strategy to offer consumers quality beauty products at affordable prices. Launched in Los Angeles in 2009, Badass with Heart (BH) Cosmetics is a brand with a strong point-of-view, producing vegan and cruelty-free cosmetics for loyal Gen Z consumers seeking high quality cosmetics at attractive price points. With over 6.5 million social media followers, BH sells through its own direct to consumer channel, and several focused retailers across the US, and Germany. The brand, which is well known for its makeup brushes, strengthens categories within the Group's current portfolio.
In 2019, BH delivered net revenue of US$55.8 million and was only distributed across online and retail channels in the US and Germany. Covid-19 significantly impacted the business with revenue decreasing to US$33.7 million in 2020, generating a loss of US$22.5 million, caused by high operating costs.
Revolution Beauty will consolidate BH Cosmetics into the wider Group's operations over the course of 2022, leveraging synergies across existing product development, supply and distribution. Revolution intends to re-energise the BH brand with new products and utilise both Revolution Beauty and BH's relationships in the US, UK and internationally. Given this, sales attributable to the acquisition during the first half of the financial year ending 28 February 2023 are expected to be minimal as Revolution Beauty onboards new BH suppliers, builds stock levels and integrates BH into the Group's operations.
BH Cosmetics filed for Chapter 11 Bankruptcy Code protection in the US Bankruptcy Court in mid-January. Following US court approval on Feb. 18, and post-satisfaction of customary closing conditions, Revolution Beauty's subsidiary, RBI Acquisition Holdings LLC, became the successful purchaser of the BH brand, its social media accounts, customer database and certain inventory.