When Honest is listed on the Nasdaq this week, it will be the culmination of the long-term recovery of the baby and beauty product group co-founded and led by actress Jessica Alba.
The company will conduct an initial public offering (IPO) on Tuesday, with an estimated maximum valuation of $1.5 billion. The company worked hard to get rid of the reputation and financial losses caused by a series of product lawsuits and recalls.
The company, which was founded in 2011, was valued at US$1.7 billion in 2015, and has since caused controversy over claims that it only uses natural ingredients in its products. In 2017, Honest also recalled baby wipes because it found mold in some packaging and was concerned that baby powder might cause skin or eye infections.
Sales fell and the company lost its status as a “unicorn”, a private company with a market value of more than $1 billion.
Alba wrote in the us regret record in the IPO prospectus: “Our rapid growth is damaging key business functions.”
Honesty never made a profit, but due to the pandemic intensified the popularity of cleaning products and other household necessities, its revenue increased from US$236 million in 2019 to US$300 million in 2020. This brings sales back to the level the company enjoyed last time in 2016.
Last year’s loss narrowed from $31 million in 2019 to $14 million.
The Honest Man has previously stated that he hopes to set its issue price at between 14 and 17 US dollars per share, aiming to raise up to 505 million US dollars, most of which will flow to existing investors who sell part of their equity.
Inspired by the birth of Alba’s first child, he founded the brand and started busy searching for household products that he thought could be used safely around his daughter. She pledged to make the company meet “safe and transparent honesty standards.”
It honestly sells its products as natural products and declares that “we prohibit the use of more than 2500 suspicious ingredients.” It is one of many consumer product manufacturers who try to capitalize on buyers’ appetite for non-synthetic and sustainable household products.
The company still marked “health and safety incidents or incorrect advertising” as an ongoing risk factor in the prospectus. Just in January of this year, the brand voluntarily recalled one of the bubble baths out of concerns that it might cause infection.
Prior to the initial public offering (IPO), the company said two weeks ago that Alba would resign as chairman of the board of directors when the company went public and hand over his position to former chief executive officer James White of Jamba Juice. According to the prospectus, she will continue to serve as the company’s chief creative officer, with an annual salary of $600,000, which is the key to the company’s future success.
It said: “Jessica Alba (Jessica Alba) is a globally recognized Latino business leader, entrepreneur, champion, actress, and best-selling author of The New York Times.” “Our brand may be. … Relying on Ms. Alba’s positive image and public awareness to maintain and increase brand awareness.”
If its price reaches the upper limit of the target range, then after the initial public offering, Alba’s 6.1% stake will be worth approximately $96 million.
CEO Nick Vlahos (Nick Vlahos) holds a 3.8% stake, valued at $61 million. Vlahos has been leading the recovery of Honest since 2017, when he succeeded co-founder and serial entrepreneur Brian Lee.
Honest received $200 million in investment from consumer-centric private equity group L Catterton in 2018. The group is selling half of its current 37.1% shares in the issuance, enough to recover the investment, thus holding 17.4% of the shares, valued at $267 m at the top of the IPO range.
Morgan Stanley, JPMorgan and Jefferies lead the product.