ACQUIRE - Procter and Gamble buys Native Deodorant for US$100M Cash

Native sells natural deodorant and a million online customers for US$100M Cash

According to a TechCrunch report last week, consumer products giant Procter and Gamble is acquiring Native a natural deodorant brand, for $100 million in cash. San Francisco-based Native initiated business in 2015 and previously raised seed funding from Azure Capital Partners.

According to industry sources,  Procter and  Gamble recently announced they would be transparent about what’s truly in their fragrances by the end of 2019. This is a huge move considering “fragrance” is an umbrella term that can include a myriad of chemicals (which are not legally required to be disclosed).

Industry Analysts estimate the annual sales of Native to be between US$25-30 million per annum.

WHY THIS IS IMPORTANT
Native moved deodorant into a subscription based business. Procter and Gamble's acquisition price does not seem related to free cash flow or revenue. It seems to be more about acquiring an innovative approach to deodorant. In that respect this purchase is not unlike Unilever's earlier purchases of Dollar Shave Club and The Honest Company. Given the high cost and time required to develop a product and a subscriber ecosystem, acquisitions like this one may well become common place.