Betterware Buys Mexican Beauty Firm JAFRA for $255M

The household appliances seller Betterware de Mexico will acquire the beauty company JAFRA from its owner in Germany in a deal worth $255 million.

Betterware announced the acquisition from Germany’s Vorwerk Group Tuesday (Jan. 18), saying that the deal — funded through $225 million in debt financing and $30 million in cash on hand — should close in the first half of the year.

“This acquisition will expand our growth potential as we extend our geographic reach to include North America, strengthen our positioning in Mexico and expand our categories served to include the Beauty and Personal Care products,” Luis G. Campos, executive chair of the Betterware board, said in a news release.

“With the addition of JAFRA’s ~443k independent leaders and consultants, the acquisition will also provide us with opportunity to continue to capitalize on the strong direct-selling online market trends and the substantial eCommerce opportunity we see for our business,” he said.

He added that the company expects to see “significant growth” from JAFRA’s ongoing digital transformation, which will be buoyed by leveraging Betterware’s scale and infrastructure.

JAFRA is a direct selling brand for beauty and personal care products with “a strong presence in Mexico and the United States,” Betterware says. The company has around 443,000 independent leaders and consultants, with revenues in the neighborhood of 5.8 billion pesos ($284.6 million).

Betterware says the acquisition gives it the opportunity to diversify its operations by getting a foothold in the growing beauty and personal care industry, which has a total addressable market in Mexico and the U.S. of about $100 billion annually.

Beyond entering a new market, the deal also gives Betterware a chance to expand its geographical footprint to the U.S., “enhancing its international focus to the North American market rather than the Latin American.”

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According to PYMNTS research, the worldwide beauty market is expected to jump to $785 billion by 2025. U.S. online health and beauty sales are expected to rocket from $63 billion in 2020 to $99 billion by next year to catch a 48% share of that market. A survey found that 53% of consumers in the U.S. are purchasing more beauty items online now than they did before the pandemic.