Drunk Elephant LLC has its eyes on being the next cosmetics company with roots in Orange County to pass the $1 billion mark in valuation (see related story, front page).
The 7-year-old skincare company, founded in Texas by Tiffany Masterson but with a good portion of its executive team now in Newport Beach, late last month disclosed that it was exploring a sale.
Moelis & Co. and Financo LLC are heading the early-stage sales efforts for the company, which is backed by San Francisco-based private equity firm VMG Partners, according to a Wall Street Journal news report.
“We have signed with bankers to explore the possibility of a sale,” Masterson told trade publication Business of Fashion last week. “We have no idea if, when, what, but we want to learn more.”
Drunk Elephant makes a variety of skincare products with natural, nontoxic ingredients, many of which are big sellers at Sephora, which started carrying the company’s products in 2015.
Its products sell in the $16 to $134 range, and include a variety of night serums, moisturizers and related offerings.
The company posted sales in the $25 million range in 2016, when VMG made a minority investment, which regulatory filings showed to be $3.8 million.
Last year’s sales figures approached $150 million, according to the Wall Street Journal, which cited industry experts speculating that a potential sale could fetch upwards of $1 billion.
The Houston-born brand has joined a list of highly successful and uniquely-named beauty companies that call OC their home, including Newport Beach-based Urban Decay Cosmetics LLC and Too Faced Cosmetics LLC in Irvine.
Too Faced sold in 2016 to Estée Lauder in a $1.45 billion deal, while Urban Decay was bought by L’Oréal in 2013 for an estimated amount of $350 million.
Both Estée Lauder and L’Oréal have been eyed in trade publications as potential suitors for Drunk Elephant.
Masterson—who holds the chief creative officer title at the company—is based in Drunk Elephant’s office in Texas, along with the brand’s creative and marketing teams. She told the Business Journal last year that she visits Newport Beach every other month, where much of its executives work.
The office in the Lido Village area of Newport Beach—listed in state filings as the company’s headquarters—“just kind of happened organically,” Masterson said.
“My executive team was already out there, so it made perfect sense to open up [a second headquarters] to accommodate them.”
Masterson’s staff of about 15 includes Chief Executive Tim Warner, who served in the same role for 12 years at Urban Decay.
Another Urban Decay transplant is Kat Miller, who’s now director of regulatory affairs at Drunk Elephant.
The brand’s chief financial officer, Lauren Barrett, was vice president of finance at Too Faced. Senior Vice President of Sales Janet Hector hails from Glamglow, a Too Faced sister company.
The company’s skincare products—about two dozen—are manufactured and shipped out of Los Angeles, while Benchmark Cosmetic Laboratories in Irvine is her “chef” who helps mix the ingredients she preselects, Masterson said last year.
