FMCG major Hindustan Unilever Limited has acquired 90.5 percent stake in skincare startup for Rs 2,955 crore in an all cash deal, the company said while announcing its quarterly results on January 22. The deal, one of the largest in the direct to consumer (D2C) space, will close by the end of the June quarter of 2025.
Moneycontrol had first reported about HUL’s deal to acquire Jaipur-based Minimalist on January 3.
“HUL to acquire 90.5 percent stake in the business through secondary buyouts (and primary capital infusion) at a pre-money enterprise value of Rs 2,955 crore,” the company said. The deal is subject to adjustments as per the transaction document, the statement added.
Through a combination of secondary transactions and primary capital infusion, HUL will buy 90.5 percent stake in the Minimalist, from existing investors including Peak XV Partners and others.
Founders Rahul Yadav and Mohit Yadav, hold a majority stake of around 61 percent in the company, Tracxn, a private markets data provider showed. Peak XV Partners was the next biggest with an ownership of 27.4 percent. Twenty Nine Capital held around 5.6 percent and ESOPs accounted for the remaining stake.
While HUL will acquire 90.5 percent in the company by the end of the June quarter of 2025 (or Q1FY26) and the remaining will be bought over time.
“(The) balance 9.5 percent will be acquired from the founders in two years as per terms set out in the transaction documents,” HUL’s statement added.
At the current enterprise value, the Yadav brothers will walk away with a total of Rs 1,800 crore and Peak XV Partners will make a handsome return of around 10X. The investor had put in Rs 79 crore roughly three years and now will bag a total of Rs 895 crore.
For the investor and the duo, the returns are impressive considering the company was founded only five years ago.
Minimalist was founded by brothers Rahul Yadav and Mohit Yadav, serial entrepreneurs, who will continue to run the company.
The huge price tag is because of Minimalist's financial discipline.
Minimalist has seen its valuation increase from around Rs 630 crore (about $75 million) to Rs 3,000 crore ($350 million) in a span of about three years, largely on the back of increasing revenues and a stable profit profile. The deal is one of the largest ones in the direct-to-consumer (D2C) space in recent years, especially in the skincare industry.
In FY24, Minimalist generated a revenue of Rs 350 crore, an increase of 89 percent from Rs 184 crore clocked in FY23. During the same period, it also saw its profit more than double from Rs 5 crore to Rs 11 crore. Minimalist has been profitable for at least four years, data showed.
Based on its FY24 numbers, Minimalist has commanded a revenue multiple of about 10X, significantly higher than 4-6X that similar direct-to-consumer (D2C) startups get during similar deals, thanks to its financial discipline.
Around three years ago, Minimalist raised Rs 110 crore ($15 million) from Unilever Ventures, the venture investing arm of Unilever, the British company that also runs HUL in India, and others, to scale its business.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
