As previously reported in CosmeticsDesign, Swiss multinational specialty chemicals company has entered into an acquisition agreement with Canadian company Lucas Meyer Cosmetics, which is currently the business unit of parent company International Flavors & Fragrances, Inc. The proposal, which “is subject to customary closing conditions, is expected to close in the first quarter of 2024,” is a strong indicator of anticipated growth for both companies in the next business quarter and beyond, shared Dr. Jochen Dubiel, Head of Corporate Communications at Clariant.
CosmeticsDesign spoke to Dr. Dubiel to learn more about the strategy behind the acquisition transaction between Clariant and Lucas Meyer, the plans for Lucas Meyer once the company joins Clariant’s portfolio, and projections for future expansion of the Lucas Meyer business.
Acquisition strategy
The proposed Lucas Meyer Cosmetics acquisition is an integral part of Clariant’s larger strategic plans for continued growth, further expansion, and to better serve manufacturers of cosmetics and personal care products. As shared by Dr. Dubiel, Clariant’s “purpose-led growth strategy is to transform its portfolio towards high-growth, high-margin and highly cash generative specialty chemicals businesses and consumer end-markets underpinned by accelerating demand for sustainable products.”
Further, he added, the transaction will “strengthen Clariant’s position as a true specialty chemical company pursuant to its purpose-led growth strategy to increase customer focus, drive innovation, lead in sustainability and enhance people engagement” by increasing its potential to better meet growing industry demand for effective, purpose-based ingredients for product formulation.
Currently, Clariant offers a wide range of cosmetic and personal care product ingredients that include actives, moisturizers, emollients, emulsifiers, film formers, hair conditioning agents, preservatives, and mild surfactants, Dr. Dubiel explained. However, by “combining its own personal care ingredients portfolio with Lucas Meyer Cosmetics,” he said, this will “enable Clariant to become a market leader in the high value cosmetic ingredients space,” and foster further industry growth and innovation.
By combining their respective strengths, “Clariant and Lucas Meyer Cosmetics are a perfect strategic fit with complementarity in key dimensions,” he added, which include “customer portfolio, product portfolio, regional strongholds and capabilities in R&D and marketing.” Additionally, he shared, the acquisition affords Clariant the opportunity to “further increase its portfolio weighting to the most attractive segments of consumer end-markets to approx. 45% with accelerating demand for sustainable products.”
Plans immediately following a successful acquisition
As Lucas Meyer Cosmetics already “has a strong, recognized brand and has been managed as a relatively independent business within the IFF portfolio,” said Dr. Dubiel, the company brings a firmly established and “unique set of capabilities and strong financial track record” to the table. Therefore, he explained, upon successful completion of the acquisition, Clariant plans to “retain the characteristics which make Lucas Meyer Cosmetics the attractive, high-value business it is, and so it will be managed separately within Care Chemicals.”
Further, he shared, while it is too early to speculate or “comment on the details of integration following the proposed acquisition,” including how Lucas Meyer’s R&D capabilities will be integrated into the Clariant business operations, he believes that “the majority of the benefits of the Lucas Meyer Cosmetics acquisition relate to growing the business through cross-selling given the complementarity of the customer and product portfolios, leveraging marketing and R&D expertise plus regional expansion.”
Future expansion
Moving forward, it is Clariant’s ambition to grow Lucas Meyer Cosmetics annual sales from approximately $100 million to approximately $180 million in the next five years, said Dr. Dubiel. By combining the companies two product portfolios, Clariant plans to meet this financial goal by “unleashing immediate cross-selling opportunities,” he said. For example, he illustrated, “Lucas Meyer Cosmetics as a leader in high quality peptides and botanical based active ingredients coming from different biomes of the world such as Australia, while our Care Chemicals business has a rapidly growing natural-focused actives and extracts portfolio, with more basic ingredients for personal care.”
Ultimately, he concluded, the proposed acquisition will ideally have a favorable outcome for both parties in the near future. “With the proposed acquisition of Lucas Meyer Cosmetics,” he explained, “Clariant will add a highly innovative business with impeccable sustainability credentials to its portfolio – in line with its strategic goal to accelerate customer and sustainability driven innovation.”
