On the past Thursday (04.01.2024), the leading cosmetics manufacturer and retailer L’Occitane announced that it has acquired the Italian luxury perfume brand Dr. Vranjes Firenze. The seller is the London-based investment company Bluegem, which has been the majority shareholder of Dr. Vranjes Firenze since 2017.

The amount that the L’Occitane group had to pay for the acquisition of the Italian luxury brand was not disclosed by the companies involved. However, Reuters has learned from insider sources that the deal valued the Italian luxury fragrance brand at 164 million US dollars (USD – equivalent to around 150 million euros).

Before I dive into further details of the acquisition, let me introduce you to the companies involved.

The companies involved in a brief profile

The L’Occitane Group, based in Luxembourg and Geneva, was founded in 1976. According to its own statements, the company is a leading international manufacturer and retailer of high-quality and sustainable beauty and wellness products.

The group operates in 90 countries worldwide and has 3,000 points of sale, including more than 1,300 its own stores. The company’s portfolio includes brands such as L’OCCITANE en Provence, Melvita, Erborian, L’OCCITANE au Brésil, LimeLife by Alcone, ELEMIS, Sol de Janeiro, and Grown Alchemist.

L’Occitane employs more than 8,500 people worldwide and generated a turnover of 2.13 billion euros and an operating profit (EBIT) of over 200 million euros in the financial year 2023. Since 2010, the company has been listed on the Hong Kong stock exchange. The main shareholder and chairman of the cosmetics company is the Austrian billionaire Reinold Geiger.

Dr. Vranjes Firenze S.p.A., based in Florence, was founded in 1983 by Dr. Paolo Vranjes. For more than 40 years, the Italian company has been developing and distributing luxury home fragrances and perfumes in over 75 countries.

Dr. Vranjes Firenze has built a network of 650 points of sale and 28 of its own stores. In 2017, the company was acquired by the British private equity firm Bluegem.

Under the leadership of Bluegem, Dr. Vranjes has more than tripled its revenue and will exceed the 42 million euro mark in 2023. The company’s EBITDA margin is over 30%.

The investment company Bluegem Capital Partners LLP was founded in 2007 and is based in London. The company’s focus is on investing in consumer goods companies. In addition to Dr. Vranjes, the German outdoor specialist Petromax has also been part of the Briton’s portfolio since 2022.

L’Occitane wants to expand its portfolio

Through the acquisition of Dr. Vranjes, the L’Occitane group wants to expand its brand portfolio with the luxury products of its Italian competitor, as Reinold Geiger, chairman of the company, emphasizes: „We are very pleased to further expand our global brand portfolio with Dr. Vranjes Firenze.“

This is how the stock market reacted

The price of the L’Occitane share listed on the Hong Kong Stock Exchange lost some ground on January 5, 2024, the day after the acquisition of Dr. Vranjes Firenze was announced. It fell by almost 1% and closed at 21.45 Hong Kong dollars.

The deal still needs to be approved by the relevant regulatory authorities. L’Occitane expects the transaction to be completed in the first quarter of the current year.