Jessica Alba: Unilever Is In Talks To Acquire Honest Company
Jessica Alba’s net worth may be getting a massive boost from her successful business, the Honest Company. WSJ reports that Unilever, the company behind huge brands like Dove and Axe, is currently in talks to buy the company that Alba started in 2011. The Honest Company was valued at $1.7 billion in 2015 but it is reported that the talks are to acquire the company for just over $1 billion.
Rumors had been swirling that the Honest Company could be going for an initial public offering, and sources say that this option is still on the table. The company has big-name investors such as venture capital firms General Catalyst Partners and Lightspeed Venture Partners, as well as money managers Fidelity Management & Research Co. and Wellington Management Co. If the company is sold, it is reported that the Honest Company will be giving them back double the money they invested.
Jessica Alba and co-founder Christopher Gavigan started the Honest Company in 2011 out of a desire for safer products for their own families and families everywhere according to the company website. The Honest Company sells a variety of products ranging from diapers and baby food to household cleaning products.
Jessica Alba’s Honest Company may sell to Unilever for $1 billion: https://t.co/liNIDckzAc pic.twitter.com/dnVu5VvOTt
— The Cut (@TheCut) September 17, 2016
Despite the growing popularity and rising revenue, the Honest Company has had its share of issues. After months of complaints on social media in 2015, the company was forced to address public comments with respect to its sunscreen. According to CNN, customers had been posting pictures online of sunburns they had received while wearing Honest Company SPF 30 sunscreen.
It was later revealed that the company had changed its sunscreen formula in March 2015 by cutting more than half of the zinc oxide, which is the main sun-blocking ingredient. The company responded saying that the new formula was just as effective as the previous one, that they had been using a better quality of zinc oxide, and that they had added additional ingredients which made up for the decrease.
Don’t buy @Honest sunscreen unless u want to look like this. Second time I’ve tried this stuff and got fried pic.twitter.com/pEhO5GYIkQ
— L (@Liiiiindsy) July 26, 2015
The Honest Company has also been the target of a number of lawsuits, including one that involved the sunscreen. A $5 million lawsuit was filed in California claiming that several of its products, including soap, diapers, and cleaners, contained “unnatural” ingredients. The suit also specifically mentioned the ineffectiveness of the sunscreen.
In February 2016, a suit was filed in New York accusing the company of deceptive labeling practices. Fortune reported that the suit stated the plaintiff’s purchased the products on the assumption that they were “natural” but that they actually contained synthetic and toxic ingredients.
In April 2016 a lawsuit was filed against the Honest Company by the Organic Consumers Association, claiming that the company’s Premium Infant Formula contained 11 synthetic ingredients. CNN reported that the company responded to the claims in the lawsuit saying that their formula had been cleared by the Food and Drug Administration and that the ingredients referred to “occur naturally in breast milk, are important for infant growth and development, and are all either permitted or required by the FDA to be present in infant formula.”
Despite building the company to the massive success it is today, with the ongoing issues the Honest Company is facing, it may be a good time for Jessica Alba to exit. She would stand to receive a sizable portion of the $1 billion buyout and could go out while the company is still on top. If the offer falls through and the Honest Company goes public, there is much less certainty. Either way, Alba has become a force to be reckoned with in the business community.
[Featured Image by Mat Hayward/Getty Images for Nordstrom]
