Exits are the name of the game for venture-backed startups—those investors want their investments back, with as much profit as possible, as fast as possible. And so Jessica Alba’s Honest Company is now reportedly exploring opportunities to sell, in addition to the possibility of going public.
Either way Alba and her associates are by-God gonna squeeze whatever they can out of those baby diapers. That’s according to Women’s Wear Daily, anyway:
The company.... is also said to be considering an M&A transaction, considering the continued coolness of the public markets, according to sources. The shift is a logical one given the volatility of the public markets, though several financial experts suggest Honest may still decide to float shares. Many companies that mull a public offering simultaneously contemplate a sale as part of a dual-track process. The final decision generally depends on which option provides a higher valuation.
WWD canvassed various industry sources, and several thought a sale would be the prettier path: “Usually a strategic buyer who sees synergies and the ability to really grow distribution or new product can pay a premium,” said one observer. The logical buyer would be somebody like Procter & Gamble or Johnson & Johnson—hypothetically—and Alba would presumably stick around as the face of the brand. “Her personal presentation…is very consistent with the value proposition of the product,” said another observer.
Honest Company reps told WWD they don’t comment “on matters related to its capital structure.”
Either way, Jessica Alba has transitioned from mid-level Hollywood stardom to entrepreneurship with a rarely seen degree of success. Cheers, Jessica Alba.