CEO said purchase fills gap and will increase revenues by more than half
JOHNSON CITY, Tenn. (WJHL) — Locally based skincare company Crown Laboratories is buying StriVectin, an anti-aging and skin rejuvenation line sold at stores like Costco, Ulta and premium skin care outlets.
CEO Jeff Bedard told News Channel 11 the purchase fills the one gap that remained in Crown’s efforts to serve all markets.
“What this really does is position us to have a full complementary line of skin care and skin solutions.,” he said.
The addition of the high-margin business will also move Crown’s annual revenues from a current $170 million to nearly $300 million.
Bedard said the acquisition, set to close in September, will mean “substantial” job growth for the community.
“As we bring those products in over the next two years our manufacturing and staff will increase,” he said. “We don’t have an exact head count of what that’ll look like as we get into the technical transfers of those products in the plant.
“We would expect somewhere around 100 jobs corporately in the area to support this growth of internationally and in the U.S.
The company employs about 350 people in Johnson City and 460 total worldwide. Bedard said it’s well ahead of schedule on commitments that were part of a tax incentive deal inked with Johnson City when it moved its corporate headquarters to north Johnson City two years ago.
“In reality it’s all about a larger company with larger buying power, larger footprint in the region, and ability to grow here and bring additional jobs from around the country into Johnson City.”
Production-wise, StriVectin currently moves about 7 million units annually. That will add about 30 demand to Crown’s Lafe Cox Drive production facility.
Bedard said the site has the capacity to bring on the StriVectin production.
“And we continue to invest at a rate of 5 to $7 million a year at the plant to bring in high-speed lines, to bring in larger mixing capacity, more logistics capacity,” he said. “We’ll continue to invest there but today we’ll be able to bring those in over the next two years with some minor cap ex exenditures.”
StriVectin will operate as a wholly owned subsidiary. It joins a line that includes portfolios in aesthetic medicine — products such as skin pens — as well as over the counter therapeutic skin care (including Blue Lizard sunscreen and PanOxyl, an acne cream).
Bedard said purchase of the 26-year-old company that once featured the tagline “Better than Botox” further positions Crown for growth.
“We wanted them because we wanted to round out our portfolio. Like I said we didn’t have an anti aging offering that was of substance,” Bedard said.
“It gives us real good new product flow as well. The R and D team here in Johnson City — and next week we’re going to announce a collaboration with ETSU and their innovation lab — allows us to do a lot of research along all the product portfolios.”
In fact, that announcement about Mun Su Rhee, Crown’s director of biological science, and Thomas Hitchcock, chief science officer, came Thursday just hours after the StriVectin news.
The acquisition also positions Crown for further global expansion, Bedard said. Crown currently sells in 36 countries.
“We’re going to be a significant player outside the U.S. starting in 2022 as we combine these businesses.”
Significant enough, Bedard hopes, that a company that spent six straight years (through 2018) on the Inc. 5000 list of fastest-growing U.S. companies will continue strong growth even though it’s already pretty big.
“They wanted to join us because it gives them an ability to invest further in their portfolio and this is truly a deal that one plus one is five, not one plus one is three or four,” Bedard said.
“So it’s a substantial growth up for both us and gives the ability to compete against the L’oreals, the Estee Lauders, the big boys. And the goal is in the next five years this will be a billion dollar company sitting here in Johnson City.”
The deal is expected to be finalized by the end of September.
“It’s a pretty proud day for all of us at Crown,” Bedard said.
“To start a company here in 2000 with four employees and a few hundred thousand dollars in revenue and 21 years later have over 600 employees and close to $300 million in revenue, I think we all should be celebrating. Today’s a good day.”