Edgewell to buy Harry’s for $1.4 billion

The owner of Schick and Wilkinson Sword adds the DTC shaving brand to its portfolio as competition continues to heat up.

Edgewell Personal Care, maker of the Schick and Wilkinson Sword razor brand, has agreed to buy shaving startup Harry’s in a deal valued at US $1.37 billion.

The companies said in a press release that the deal combines Harry’s expertise in brand building and direct-to-consumer marketing with Edgewell’s global scale, “strong intellectual property” and product technology.

Founded in 2013, Harry’s sells razors, face washes and other grooming products directly to consumers online and through a monthly subscription service. In 2016, it began selling in-store in Target locations, and just last year, announced a deal to bring its razors into 2,200 Walmart U.S. stores. Harry’s also owns Flamingo, a line of women’s razors and waxes.

As part of the deal, Harry’s co-founders Andy Katz-Mayfield and Jeff Raider become co-presidents of Edgewell’s US operations.

Edgewell, which was spun out of Energizer Holdings in 2015, already sells the Schick and Wilkinson Sword razors, as well as the Bulldog and Jack Black male skin care and grooming brands.

The announcement follows Unilever’s $1 billion purchase of Dollar Shave Club in 2016. Acquiring the direct-to-consumer brand – which was one of the earliest entrants into the DTC shaving market, along with Harry’s – not only allowed it tap into what was still a nascent consumer trend at the time, but allowed the CPG to go up against category leaders, like P&G’s Gillette and Schick.

According to a report in the New York Times, combined market share for Edgewell and Harry’s will still remain a “distant second” to P&G’s Gillette. Euromonitor data indicates Gillette owned 47.3% of the U.S. market last year, while Edgewell held 13.6% between its brands and Harry’s had 2.6% market share.

Approximately 79% of the value of the transaction will be paid in cash and 21% in Edgewell common stock. Once the transaction comes to a close, expected by the end of March 2020, Harry’s shareholders will own approximately 11% of Edgewell.