Jessica Alba News Update: Alba’s Honest Co. May Opt for Sale

By Dipannita - 09 Apr '16 09:05AM

Honest Co, the company started by Jessica Alba during her foray into the financial world, has decided to consider a sale because of the ongoing slump in the market.

Morgan Stanley and Goldman, Sachs and Co. are exploring an IPO on behalf of the company, but owing to the dearth of interest in the public markets, are now considering an M&A.

Experts continue to predict that the company will float shares but due to the volatile nature of the market, may opt for a 'dual-track process.' This means that while they tentatively consider offering public shares, they also think about sale. The more financially viable option is chosen in the end.

Martin Okner, managing director of SHM Corporate Navigators, claimed that in the current scenario, a sale would be the best option. Many other industry sources remain convinced that given the condition of the market, a company of this scale will favour most through a sale. The founding partner of The O-Alliance, Andrea Weiss, also added that a company of this scale would definitely attract strategic buyers who will be willing to envision the opportunities from the sale may pay a premium.

Honest. Co focuses on household good and baby products. According to reports, the potential buyers may include Procter & Gamble, Johnson & Johnson, Kimberly Clark, Unilever, Colgate and L'Oreal.

During 2015, Honest's worth was calculated to be around $1.7 billion. It's growth trajectory has shown great promise meaning that the valuation of its consumer goods good up to 3,5 times sales. According to Okner, Honest's valuation ranged between $500 million to $1.05 billion.

Another feature Honest has in its power is Jessica Alba's star value. As she is a new mother herself, the company is considered credible. Even if a sale does occur, she is predicted to remain the face of the brand for a few more years owing to her appeal.

Though some products have faced allegations of not being effective, Okner feels that the brand is bigger than the negative allegations it faces.