The Honest Company, the household products company that claims to use non-toxic ingredients, was in talks with big consumer products companies to sell itself, according to a report last week. And another report Thursday said the company co-founded by Jessica Alba in 2011 could be bought by Unilever for over $1 billion.
On Sept. 9, Recode cited anonymous sources who said Honest was in talks with global consumer products heavyweights, the likes of Procter & Gamble and Unilever. And a Thursday report in the Wall Street Journal cited unidentified “people familiar with the matter” to disclose that the British-Dutch consumer goods giant was in early talks to acquire the company.
According to the Journal, the deal being discussed values Honest “at over $1 billion but significantly less than the $1.7 billion valuation that was placed on Honest in a fundraising round last year.”
Honest, which promotes ethical consumerism and claims to avoid harsh chemicals in its products, has raised over $200 million since it was founded, of which $100 million was raised in 2015. The company sells diapers, hand sanitizers, cleaning and beauty products, mostly through its subscription website, primarily targeting young mothers. It generated revenues of about $300 million in 2015.
Unilever, which sells a far wider variety of products in many parts of the world, is absent from some of the product categories in the United States that Honest has a presence in, such as diapers. In case the acquisition goes through, Unilever will also gain a foothold in the fast-growing “natural” or environment-friendly cleaning and beauty products.
Honest may still choose to take the stock markets route and announce an initial public offering, sources told the Journal. The company has previously made clear its intention to go public, but has ostensibly held back given the weak performance of IPOs in the last few months.
In August, Unilever bought another e-commerce consumer goods company, Dollar Shave Club, for $1 billion.