Aurelius Buys The Body Shop From Natura In Cut Price Deal

European private equity business Aurelius looks to have grabbed istelf a bargain after it acquired The Body Shop International from Brazil’s Natura & Co in a deal that is expected to close next month.

Subject to approval by the relevant competition and regulatory authorities, the purchase agreement values The Body Shop at just shy of $260 million, including an earn-out of $112 million, subject to certain conditions.

That makes it a cut price deal from Natura &Co, which acquired the retail chain from L’Oréal in 2017 for $1.04 billion and had appointed Morgan Stanley
MS
 for the sale, keen to reach a provisional agreement sooner rather than later.

It was understood to have valued the business at $492 million, which proved significantly more than it actually achieved for the company. The decision to offload The Body Shop came after Natura sold its Aesop business to L’Oreal for $2.4 billion in April of this year as it said it was “focusing on strategic priorities.”

The Body Shop, which is headquartered in London and employs around 7,000 staff, has operations in 89 markets with over 900 company-owned stores in 20 countries and partnerships with head franchisees which operate circa 1,600 franchised stores in a further 69 geographies.

The Body Shop, famed for its ethical approach and cruelty free product ethos, has been B-Corp certified since 2019.

Aurelius To Re-energize Body Shop

Aurelius said in a statement that as “experts in complex transactions, with a strong focus on driving operational improvements,” that the company would work with the management team to drive operational excellence across the group, leveraging its expertise and experience in the omni-channel retail and wholesale markets.

This, combined with The Body Shop’s brand and heritage in socially responsible products, means that despite the challenging retail market there is an opportunity to re-energize the business to enable it to take advantage of positive trends in the high-growth beauty market, Aurelius added.

In recent years, Aurelius has completed a number of complex corporate carve-outs across Europe, including the acquisitions of brands such as Footasylum from JD Sports and LSG Sky Chefs (LSG Group) from Deutsche Lufthansa, while it also owns the U.K.’s Lloyds Pharmacy group.

“We are delighted to be undertaking this acquisition of an iconic British brand, which pioneered the cruelty-free and natural ingredient movement in the health and beauty market. We look forward to working with CEO Ian Bickley and his team to drive operational improvements and re-energize the business, and help to deliver the next chapter of success,” said Tristan Nagler, partner at Aurelius.

Body Shop: A New Chapter

Meantime Ian Bickley, the recently-appointed CEO of The Body Shop, added: “Today, we celebrate a truly historic moment for The Body Shop as we join forces with Aurelius to begin a new chapter, allowing us to continue building the relevancy of this global brand for future generations….as we adapt and flourish in new global retail environments, always with an eye on sustainable and profitable growth.”

Aurelius had joined the bidders relatively late in the process, with private equity firm Epiris and Elliott Advisors, the owner of a bookselling group that includes Barnes & Noble
BKS
and Waterstones, also in the frame to acquire The Body Shop, while Alteri Investors had also been linked with a possible bid.

Although The Body Shop has struggled for some years, it retains a prominent presence domestically and as an international brand and, under the auspices of Brazilian group Natura &Co, it had attempted to reposition itself along the lines of its founding, ethical and cruelty-free principles.