eCommerce giant THG has acquired prestige US skincare brand Biossance for $20m (£16m) after just five hours of bidding.

Founded in 2015, Biossance has generated global revenues of $300m and is currently stocked in over 1,600 stores globally including Sephora, Harrods, Space NK, Douglas and Selfridges plus online through Lookfantastic and Cult Beauty.

In a statement on the London Stock Exchange this morning, THG announced it acquired  Biossance from US biotechnology group Amyris Inc, which recently commenced voluntary Chapter 11 proceedings.

An auction was held on November 30 with THG declared as the successful bidder for assets including IP, plus inventory and debtors with a book value of $29m.

Matthew Moulding, CEO of THG, commented: “We are delighted to acquire the pre-eminent skincare brand Biossance.

“The technology-led, clean chemistry formulations resonate with consumers globally, evidenced by a strong performance on our own retail sites.

“We have significant experience in prestige skincare as an innovator and manufacturer, and through our own brand portfolio including Perricone MD and ESPA.

“We’re incredibly fortunate and excited to secure this opportunity to work with the Biossance team and further build on the brand’s strong awareness across the US.

“The fit within THG is perfect, with Biossance already generating c. $2m in revenue across our retail sites in the past 12 months. Integration on to the Ingenuity platform will commence as soon as the deal is finalised.”

THG founder renews LSE criticism after Hotel Chocolat sale

Moulding followed up the announcement by  lifting the lid on the deal in a typically punchy LinkedIn post.

He said 2023 had been a difficult year for businesses generally because of the combination of inflation, ‘exploding’ interest rates and a ‘weary consumer’.

Moulding said some ‘blatantly dubious characters’ in the media had piled into THG.

“Maybe they had a ‘Christmas drink’ riding on it?” he asked. “Well, they may now be tucking into a smaller turkey this year instead.

“Not only is THG still here, but we’ve grown stronger and had some good fun in 2023. And now we’ve managed to squeeze another piece of exciting news in before year end.”

He said the deal to buy US beauty brand Biossance was a welcome change from foreign buyers gobble up UK companies like a game of ‘Pac-Man.’

Explaining how the deal came about Moulding wrote: “Launched in 2015, Amyris went on to invest $300m-$400m in building Biossance. $200m was invested in brand marketing alone, with Reese Witherspoon (pictured) the key ambassador, And so the Biossance brand equity is strong, especially across the US.

“In 2022, annual revenues reached almost $100m, but with losses of c$90m to match. Amyris, a bio-tech business, launched other, smaller, celebrity brands with a similar strategy.

“The losses and cash burn finally caught up, and Amyris went bust a few weeks ago, and all brands put up for sale.

“Usually, there’d be a queue of buyers for a brand like Biossance but buyer interest was minimal. The only other serious bidder was a US PE firm.

“Why? In short, because nobody has a THG Ingenuity division. Biossance has a fantastic management team, led by Catherine Gore, but they need a new supply chain, tech platform, and cheaper routes to market. We bring these. Biossance should be immediately breakeven in THG.

“After five hours of bidding, THG won by agreeing to pay $20m for Biossance. Included in the deal is c$23m of stock and $6m of receivables.

“If we do a good job in converting these assets into cash, it could mean we’ve paid less than nothing for a large, US, premium beauty brand…..Even UK companies can justify this!”

Clothing rental platform HURR raises £7.9m investment