Harry's started out trying to disrupt the legacy razor business. Now it'll join one.
The six-year-old New York City-based grooming company, founded by Andy Katz-Mayfield and Warby Parker co-founder Jeff Raider, is set to announce on Thursday that it will be acquired by one of its biggest competitors.
In a deal valued at $1.37 billion, according to The New York Times, the Shelton, Connecticut-based Edgewell Personal Care, which is the parent company of Schick, will acquire the razor company and put Katz-Mayfield and Raider in charge of U.S. operations.
The move is the latest in a string of men's grooming acquisitions, which was touched off in 2016 with Unilever's $1 billion purchase of Michael Dubin's Venice, California-based razor subscription service, Dollar Shave Club. Tristan Walker's Palo Alto, California-based Walker & Company Brands, maker of Bevel men's grooming products and Form beauty products, sold to Procter & Gamble in 2018 for between $20 million and $40 million.
Katz-Mayfield and Raider co-founded Harry's in 2013 as a direct-to-consumer subscription company, selling razors and shaving products through the mail. Over the years, it added in-store displays with brick-and-mortar retailers including Target and Walmart. It also purchased a factory in Germany in 2014. And in 2018 it added a women's grooming line called Flamingo.
The transaction is expected to close at the end of the first quarter of 2020, with Katz-Mayfield and Raider becoming co-presidents of Edgewell's U.S. operations. Edgewell's CEO told The New York Times that his company "lacked a way to communicate with the consumer," and the acquisition will help bring Edgewell's marketing up to speed. For Harry's, the co-founders said the deal is the best way to grow the company, which was previously considering an IPO.
"This got us where we wanted to go more quickly than some alternative route," Katz-Mayfield told The New York Times.