The Hermès of the personal care industry has been sold, and PE made 17 billion yuan.

Ask AI · How did Anrund Capital achieve over RMB 17 billion in returns through Olapari?

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THECAPITAL

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This article is 4,098 Chinese characters, about 5.8 minutes

By | Wang Tao Edited by | Wu Ren

Source | #Rongzhong Finance

(ID: thecapital)

Here comes another acquisition that made PE banks roll in profits.

Not long ago, German consumer goods giant Henkel announced a full acquisition of the U.S. brand Olapari, known as the “Hermès of hair care and wash,” for $1.4 billion (equivalent to more than RMB 9.6 billion).

It’s reported that after the news broke, Olapari’s pre-market share price surged by 50%. But what’s interesting is that even after the jump, the stock price was still just over $2 per share. Back when it went public in 2021, the opening price was $25, and its market cap still soared to $16 billion.

From $16 billion down to $1.4 billion—over five years, it shrank by 90%.

Olapari’s secondary-market investors felt like they had lost everything in this deal. But for the PE powerhouse behind it, Anrund Capital, over these six years, dividends, cash-outs through the IPO, and ultimately a takeover—adding it all up—netted more than RMB 17 billion.

A hair-care brand that emerged from a California garage—within six years it played out the entire storyline of “from being crowned to falling, and then to being sold.” The founders cashed out and exited, the PE profited handsomely, and only the secondary-market investors became the biggest victims of the story.

Why was Olapari crowned as a legend?

In 2014, there was a widely recognized pain point in the hair-dye industry: the prettier the color, the more damage it did to your hair. Because during bleaching and dyeing, the disulfide bonds inside the hair are massively broken—leading to dryness, frizz, and breakage.

At the time, two scientists in California, Pressly and Hawker, synthesized an active ingredient called “dimercapto-glycol dimaleate.” The name was awkward, but the effect was straightforward: it could re-link the chemical bonds that had been damaged during the dyeing process. In simple terms, after you dye your hair, the hair condition doesn’t just fail to get worse—it may even improve.

Back then, Olapari’s founders, Dean and Darcy Christal, saw a business opportunity and quickly commercialized this technology, giving birth to Olapari.

After starting the business, they also made a smart strategy: rather than going directly to consumers, they first targeted the professional salon market.

The logic behind it was actually simple. When it comes to dyeing hair, “Mr. Tony”’s advice is often more convincing than any advertisement. Hairstylists are natural KOLs, and salons are a natural experience setting. Once word of mouth establishes itself within the professional circle, then move into the consumer market—when its products hit Sephora, they would immediately become bestsellers.

The customer acquisition cost for this strategy was nearly zero. There was no need to burn money on ad placements, and no need to hire celebrity endorsers. Olapari went viral on social media purely through hairstylists and consumers spreading the word.

In terms of pricing, a 250ml bottle of No.4 shampoo sold for $28, No.3 repair serum sold for $30, and buying the full set of all products cost nearly $200. In the hair-care category, that’s an expensive tier—but consumers were willing to pay. Because brand premiums driven by professional endorsement are far more solid than brand awareness built by hard-spending marketing budgets.

By 2019, Olapari’s annual sales had surpassed $100 million. The products were sold in more than 100 countries worldwide.

In November 2019, Anrund Capital officially announced the acquisition of Olapari. At the time, industry insiders said the valuation was around $1 billion.

According to public information, Anrund Capital was founded in 1984. It manages assets worth more than $100 billion and ranks among the top ten global private equity funds. Previously, it invested in well-known companies such as lululemon and European beauty retailer Douglas.

Olapari thus officially entered the Anrund Capital era.

Bought for $1.4B, topped at $16B, sold for $1.4B

This acquisition officially closed in January 2020. The total consideration was about $1.4 billion. Of that, Anrund Capital contributed about $550 million in its own funds, and it also arranged $500 million in senior secured credit facilities.

Less than a year after taking control, Anrund Capital loaded Olapari with $470 million of debt, then distributed that money back to itself in the form of a special dividend.

So, the $550 million invested in the beginning was quickly retrieved: the $470 million came back through dividends. In other words, Anrund Capital effectively used less than $100 million to buy this company. Meanwhile, Olapari ended up carrying nearly $800 million in debt.

But Anrund Capital didn’t stop at just that. During its management period, Olapari’s growth truly accelerated. In 2019 revenue was $148 million; in 2020 it surged to $282 million, up 90% year over year.

During the pandemic period when people stayed at home, consumers shifted the money they used to spend on cosmetics toward skincare and hair care. Olapari’s DTC e-commerce business also took off. In the first half of 2021, the half-year revenue reached $270 million, and full-year sales hit $600 million. Adjusted EBITDA profit margin was as high as 71%. That number is almost unheard of in consumer goods—more like a software company’s level. With a team of fewer than 150 people, revenue per capita was $6.4 million, roughly comparable to Google and Apple.

On September 30, 2021, Olapari officially rang the bell at Nasdaq. The original pricing range was $14 to $16 per share, later raised to $17 to $19, and ultimately issued at $21, with additional shares also issued as an upsizing—showing just how much the market chased it.

The IPO raised $1.55 billion. The stock closed at $24.5 on the first day, and the market cap jumped to $16 billion. Goldman Sachs, JPMorgan, Morgan Stanley, and Barclays served as joint lead underwriters.

The most important point is that in this IPO, all the shares issued were old shares. That means none of the $1.55 billion raised went into the company’s pocket—it all went into the hands of Anrund Capital and other existing shareholders. Even Mousse Partners, the Chanel family’s investment platform, sold shares worth about $95 million in the IPO.

At the time of the dividends, it recovered $470 million, and through IPO cash-out it recovered about $1.55 billion—just these two items alone, Anrund Capital had already recovered more than $2 billion. And it still held roughly 80% of Olapari’s voting rights. Based on the share price at the time, the value of that equity stake was over $12 billion.

If the story had ended there, Anrund Capital’s investment in Olapari might have become one of the classic cases in PE history. But Olapari’s good days came fast and left just as quickly.

In 2022, the first crack appeared. When the pandemic ended, consumers spent their money back on cosmetics and travel, and the home hair-care boom cooled down. At the same time, Olapari’s success attracted a wave of followers—K18, Redken’s Acidic Bonding Concentrate, Virtue Labs… “bond-connecting repair” was no longer an exclusive story for Olapari. The shelves were filled with too many similar—and cheaper—options.

Then came the deadly lawsuit in February 2023. Twenty-eight consumers filed a complaint with the U.S. Federal Court in California, accusing Olapari’s products of causing hair loss, scalp damage, and even patches of baldness. The lawsuit itself was later basically dismissed because the judge believed the plaintiffs’ circumstances were too different to meet the requirements for a class action; in the end, only the case of the first plaintiff continued, and later she also voluntarily withdrew her complaint.

But the damage was already done. Social media is a double-edged sword. The TikTok that once crowned Olapari this time became an amplifier of a brand crisis.

Under posts about the products, large numbers of users shared videos of themselves saying they “lost hair after using Olapari,” and the comment section was full of panic. Even though chemical experts and dermatologists repeatedly clarified that the ingredients mentioned in the lawsuit (panthenol and lily aldehyde) are safe under normal use conditions, and even though Olapari proactively disclosed the full report of a third-party human repeat patch test (HRIPT), once consumer trust collapses, “repair” is far more difficult than “repairing disulfide bonds.”

In 2023, Olapari’s share price fell by more than 50%. On the shelves at Sephora and Ulta, negative reviews piled up. Then-CEO JuE Wong recorded a video to debunk the claims in person, but it was only a drop in the bucket.

By 2024 and 2025, Amanda Baldwin, the newly appointed CEO of Olapari, tried to launch new products, tell scientific stories, and strengthen the professional salon channel. But for the full 2025 fiscal year, revenue was $423 million, with almost no growth. Moreover, revenue in the third quarter of 2025 fell by 3.8% year over year.

Before Henkel announced the acquisition, Olapari’s share price had already fallen to around $1.3, and its market cap was under $1 billion. Compared with the IPO opening price of $25, it was down 95%.

But what about Anrund Capital? According to Olapari’s annual report disclosure, Anrund Capital still held about 75% of the shares. Based on Henkel’s offer price of $2.06 per share, this sale would fetch about $1.05 billion.

Adding the previous $470 million dividends and the $1.55 billion IPO cash-out, over six years Anrund Capital cumulatively recovered more than $3 billion from Olapari. After subtracting the initial investment of about $550 million, net profit exceeded $2.4 billion—roughly RMB 17 billion.

This is the most bittersweet part of the whole deal. The brand’s value evaporated by 90%, but PE walked away whole—indeed, if you tally it carefully, it even walked away with a full bowl.

But these moves are exactly in line with PE’s underlying logic when investing in consumer brands. It was never about “growing with the brand together.” It was about “capitalizing within the best time window, then exiting.” Olapari’s story is just that logic taken to the extreme.

Henkel’s算盘—pick up a bargain or take a gamble?

But why did Henkel spend $1.4 billion to buy an “outdated internet celebrity” brand?

At face value, the price really does look like a “bargain.” After all, a brand that was valued at $16 billion at its peak can now be bought at a 10% price. Olapari’s annual revenue is around $423 million, implying a price-to-sales ratio (PS) of only 3.3x.

But Henkel may not be looking at only the price.

Henkel’s best-known hair-care brand is Schwarzkopf, which has solid coverage in both professional salon and mass retail channels. However, Schwarzkopf is positioned toward the mass market; in the high-end professional hair-care market, it has long lacked heavyweight presence. Olapari neatly fills this missing piece: its professional salon channel footprint and its brand recognition among younger consumers are things Schwarzkopf doesn’t have.

A survey by Canadian investment bank Canaccord Genuity in December last year showed that among consumers aged 18 to 29, Olapari is still ranked as the number one high-end hair-care brand. The brand has declined, but its share of mind remains.

In recent years, Henkel CEO Carsten Knobel has been pushing a strategy of “purposeful growth,” with the core being to grow the consumer brands business through acquisitions—especially to move into high-margin categories. Just this February, Henkel spent €2.1 billion to buy industrial coatings company Stahl, and previously acquired the U.S. hair-care brand “Not Your Mother’s.” Olapari is the latest piece to be placed on this chessboard. Henkel’s Executive Vice President of Consumer Brands, Wolfgang König, directly said that Olapari “is highly complementary with our existing product portfolio.”

Henkel’s thinking is probably to combine its globally covered distribution network (Henkel has mature B2B salon channels and retail channels worldwide) with Olapari’s brand strength and technology moat, then rebuild the brand’s size. About half of Olapari’s revenue currently comes from North America, and there’s still substantial room in international markets.

In simple terms, Henkel is betting that “Olapari’s brand value was undervalued.” While brand reputation damage is indeed real, the core technology hasn’t been lost, patent barriers still exist, and loyalty among professional hairstylists hasn’t completely collapsed.

For a strong brand whose valuation has been pushed down by short-term negative public opinion, it might be a good acquisition target for a buyer with channels and resources.

But the risks are substantial too. Over the past two years, Olapari’s revenue has basically stagnated. The “bond-connecting repair” track has become crowded, and the negative impressions the brand built up on social media won’t automatically disappear just because the owner changes. Henkel needs to exert effort simultaneously in product innovation, brand reimagination, and channel expansion—and it also needs enough patience.

Worth noting is that in the same week, Estée Lauder and Spanish beauty giant Puig confirmed they are in merger talks. The valuation of the combined new company could exceed $40 billion. This would be the largest transaction in the beauty industry in history. Anrund Capital also signed a majority equity acquisition agreement for the Los Angeles body care brand Salt & Stone, continuing to bet on the beauty track.

All these signs suggest that the global beauty industry is in a round of mergers and acquisitions fever.

After the past few years of slowing growth and falling valuations, many high-quality brands finally saw their prices drop into the range where industry buyers are willing to act. Big groups are also increasingly clear that relying solely on internal incubating of new brands is too slow. Buying ready-made brand assets directly through acquisitions is the most efficient way to expand categories.

So a clear industrial chain has taken shape: founders build the brand, PE comes in to scale and capitalize it, and industry giants take over to integrate it—forming a “three-stage relay” in consumer brand building.

In fact, this path has been running for many years in the beauty industries of Europe and the U.S. The same pattern happened when Shiseido bought Drunk Elephant for $845 million; the same happened when Unilever paid nearly $500 million to acquire Tatcha; the same happened when Coty took an investment stake in Kylie Cosmetics for $600 million.

Looking back, domestic China has gone through similar cycles in the new consumer brand space in recent years. The dividend from traffic created a batch of influencer brands. Capital rushed in to push valuations higher, then growth slowed, financing tightened, and valuations corrected downward.

The difference is that industrial acquisitions in China are not yet active enough. Some large groups have limited willingness to do M&A and limited integration capabilities, and many brands end up stuck in the awkward stage of “PE wants to exit, but there’s no strategic buyer to take over.”

Olapari’s story at least provides one complete sample: category innovation can help you break out, but long-term competitive strength depends on whether you can keep investing in technology iteration, deepening channel execution, and maintaining consumer trust.

Relying on just a blockbuster concept plus capital leverage probably can’t hold up for too long.