Clariant to purchase Lucas Meyer Cosmetics

Clariant has agreed to buy the personal care ingredients maker Lucas Meyer Cosmetics from International Flavors and Fragrances (IFF) for $810 million. In addition to Lucas Meyer, the deal includes another ingredient brand, IBR, as well as 195 employees and six research and production sites around the world.

Clariant CEO Conrad Keijzer said on an Oct. 30 call with analysts that IFF’s cosmetic ingredientbusiness had a profit margin last year of almost 50% on $100 million in sales. Clariant aims to increase sales to $180 million by 2028. Keijzer said Clariant will continue to use the Lucas Meyer name, crediting the unit with good brand recognition among cosmetic and personal care product makers.

IFF purchased Lucas Meyer in 2015 for $305 million. However, following its 2021 merger with DuPont’s nutrition and biosciences business, IFF has been restructuring to focus on nutrition, scent, and healthcare markets. IFF sold a microbial control business to Lanxess last year and two specialty flavoring units to private equity firms earlier this year.

Keijzer said cosmetic ingredients are “one of the most attractive, profitable, and fastest-growing specialty chemicals markets.” He said the acquisition is a good fit because Lucas Meyer is strong in peptides and botanical active ingredients, whereas Clariant’s catalog centers on basic, functional ingredients. Similarly, he said, Lucas Meyer’s customers in premium, international, and independent brands will complement Clariant’s base of major multinationals.

The investment firm Jefferies is cautiously optimistic about the acquisition. In a note to investors, Jefferies said that the purchase price was high and that Clariant’s growth projections for Lucas Meyer are well above what competing firms and businesses are expecting. However, the acquisition gives Clariant a solid growth engine and builds on an existing strength in personal care, the note says.