Shaving Start-up Harry will be sold to the owner of Schick for $ 1.37 billion
When they founded Harry as a shaving start nearly nine years ago, Andy Katz-Mayfield and Jeff Raider sought to create a decade-old business dominated by two giants in the field.
Now they are with one of them.
Edgewell Personal Care, the company that owns Schick and Wilkinson shaving gloves, as well as Hawaiian Tropic, plans to announce on Thursday that it will buy Harry for around $ 1.37 billion in stock and cash. The deal will lead Katz-Mayfield and Mr. Raider to run Edgewell's US operations.
It is the largest newer example an established company that buys a younger, nimbler competitor who is born of the internet and now characterized by consumers in new ways. It has signed deals like Unilever, which bought Dollar Shave Club, the second shaving startup sensor, for $ 1[ads1] billion three years ago, as well as Walmart bought the online men's wear shop Bonobos for around $ 310 million.
Harry sells shavers, face washes and lotions, as well as the Flamingo series of women's shavers and waxes, directly to consumers over the internet, offering subscriptions (a certain number of sheets delivered to your home each month) and collaborating with the clothing retailer J. Crew. Based in New York, it owns the German factory that manufactures its knives and has invested in other businesses such as Hims, a startup that sells hair removal prevention products.
Edgewell, based in Shelton, Conn., Was spun out of Energizer Holdings in 2015, and the oldest brand Wilkinson, began making shavers in 1898.
In the men's shaving market, the combined Edgewell and Harry remain 39; s modeled a distant second to the Procter & Old's Gillette brand, which commanded 47.3 percent of the US market last year, according to Euromonitor data. Edgewell's best brands held about 13.6 percent of the market, while Harry had approx. 2.6 percent.
However, Edgewell and Harry's leaders said in an interview that they saw a chance to form a large, new consumer product company infused with both global reach and new ways of marketing to customers.
"We have had an interesting product portfolio, but we lacked a way to communicate with consumers," said Rod Little, CEO of Edgewell.
Negotiations between two companies began shortly after Mr. Little was appointed to his posts in March, the leaders said, Harry's management had considered alternatives, as an initial public offering, but combined with an established brand was the most sensible in the past.
"This got us where we wanted to go faster than any alternative route , "Katz-Mayfield said.
Under the agreement, which was approved by both boards on Wednesday, 79 percent of Edgewell's offerings – just over $ 1 billion – would be in cash, the remainder being in stock, providing Harry's investors a about 11 percent stake in the combined company.
Mr Katz-Mayfield and Mr. Raider will become co-managers of Edgewell's US operations, giving them a larger perch and more brands. monitor and overtake. Mr. Little will remain CEO of the overall business.
The agreement is expected to close by March 31, 2020.
