Yellow Wood Partners-backed Suave Brands Company to pick up ChapStick

Haleon, a global consumer healthcare company, is the seller.

  • Haleon will receive pre-tax cash proceeds of around $430m
  • ChapStick is a lip care brand
  • Yellow Wood is a Boston-based private investment firm

Suave Brands Company, a portfolio company of Yellow Wood Partners, has agreed to acquire ChapStick, a lip care brand, from Haleon.

ChapStick generated £112 million ($142.5 million; €130.8 million) in revenue for the FY ended 31 December 2023.

Haleon will receive pre-tax cash proceeds of around $430 million, as well as a passive minority interest in the Suave Brands Company. This interest was valued at around $80 million at the time of signing the agreement.

“Chapstick has the highest brand awareness in lip care, as well as the strongest purchase conversion among all brands in the category,” said Dana Schmaltz, partner at Yellow Wood. “Similar to Suave, ChapStick will benefit from Suave Brands Company’s leadership, setting the brand up for continued innovation and growth driven by increased consumer marketing investments, as well as a more focused sales approach.”

The cash proceeds from the sale will be used to pay down debt, underpinning Haleon’s confidence to de-lever to net debt/adjusted EBITDA of below 3x during 2024, according to a release.

ChapStick will be Yellow Wood’s fifth corporate carveout transaction in the past four years.

Suave Brands Company was founded in 2023, when Yellow Wood Partners acquired the Suave brand from Unilever.

The transaction is expected to close in the first half of 2024, subject to regulatory approvals.

Suave is a personal care brand that sells products across the hair, body, skin and antiperspirant deodorant segments. It is based in Chicago.

Yellow Wood is a Boston-based private investment firm that focuses on the consumer industry in the middle market.

Haleon is a global consumer healthcare company based in Surrey, UK. Its product portfolio spans five major categories – oral health, pain relief, respiratory health, digestive health and other, and vitamins, minerals and supplements.