Church & Dwight has acquired Hero Cosmetics for $630 million.
Best known for its hydrocolloid pimple patches, Hero’s acne care products are available in roughly 8,000 U.S. doors, including Target, Ulta Beauty, CVS Pharmacy, Bloomingdale’s, Kohl’s, Urban Outfitters, Neiman Marcus and other retailers, as well as online.
The brand, which first debuted on Amazon in 2017 before launching its direct-to-consumer website the following year, is reportedly on track to reach $140 million in sales in 2022, up from $100 million in 2021.
Church & Dwight’s key categories are household and personal care products. Hero joins Arm & Hammer, OxiClean, Batiste, Viviscal, Nair, Flawless, Trojan, Vitafusion, Toppik and other brands in the company’s growing portfolio. Investment firm Financo Raymond James advised on the deal, which marks Church & Dwight’s first acquisition in 2022, following the acquisition of alcohol-free mouthwash brand TheraBreath for $580 million in the latter half of 2021.
“Hero and its Mighty Patch brand represent a powerful addition to our existing Specialty Hair and Skin portfolio,” said Matthew T. Farrell, chief executive officer of Church & Dwight, in a statement. “The brand skews toward younger consumers and consistently has a high level of brand loyalty and repeat purchase.”
Around 70 percent of Hero customers enter the brand through a Mighty Patch purchase, of which there are now seven varieties including the original nighttime patch, nose, full-face and invisible daytime patches. The franchise’s offerings range in price from $12.99 to $32.
“[Church & Dwight] excels at things we’re looking to do. We have big ambitions for our brand,” said Ju Rhyu, cofounder and CEO of Hero, noting that the acquisition will poise Hero, which is presently only available in the U.S., for global expansion, although she did not comment on which international markets the brand seeks to break into.
Rhyu will remain CEO of the brand, and cofounders Dwight Lee and Andy Lee will continue in their respective roles as chief operating officer and chief data officer at Hero.
“We’re scaling very fast. We knew the right time [to be acquired] was now,” said Rhyu, adding that under its new ownership, Hero also seeks to update its packaging and bolster its marketing efforts.
Acne products are gaining momentum and market share. Data from IRI for the first quarter of 2022 tracked skin care product sales in the mass market at $1.11 billion, with acne treatments comprising $159 million of that total, a 13 percent increase versus the previous quarter.
Hero has nearly 30 stock keeping units to date, including a post-blemish recovery cream, dark spots and redness balms, a brightening serum and a body care line comprised of an exfoliating body wash, toner, body scrub and moisturizer.
Earlier this year, Rhyu told WWD it’s possible Hero will expand into products beyond acne care in the near future.
“Our culture’s are aligned,” Rhyu said of what initially drew her to Church & Dwight. “I remember when we were talking with them, someone described their culture as ‘low ego and high aptitude,’ and the Hero culture really reflects that as well.”
In 2021, Hero acquired a minority investment from Aria Growth Partners for an undisclosed sum. Said Trevor Nelson and Jackie Dunklau, cofounders of the private equity firm in an email to WWD: “Aria has been honored to work alongside Ju, Dwight, Andy and their outstanding team. Hero represents the best of the beauty world: amazing founders who’ve forever changed for the better the way in which people solve emotionally charged skin care issues.”