Pencarrow and founders exit Essano in big beauty sale

Supermarket hair and skincare brand Essano has been sold to Melbourne's Vitality Brands.

Essano, the acclaimed clean beauty brand sold on supermarket shelves and fronted by Rachel Hunter, is turning to Australian ownership in an acquisition that will see its founders and private equity investor Pencarrow sell out.

The business, 50 per cent owned by Pencarrow, 37.5 per cent owned by co-founders Shane Young and Anthony Gadsdon, and 12.5 per cent owned by business consultant Peter Borrell, has been bought by Melbourne-based Vitality Brands.

The Essano acquisition, which included the Dominate men’s hair product line, adds to Vitality’s beauty brand line-up of Cancer Council Sunscreen, Tribe Skincare and Epzen.

The price paid was confidential, although Vitality estimated the combined group would see annual turnover of A$130 million ($142m).

“Essano has a strong presence and loyal customer following in the New Zealand market and will be an essential ingredient in our plans to expand the entire portfolio of brands across the globe,” Vitality Brands co-founder and managing director Richard Meyrick said in a written statement announcing the deal.

“We’re also pleased the deal secures the long-term future expansion of our manufacturing plant,” Essano co-founder Young added.

Vitality had committed to continue operations at Essano’s manufacturing facility in Māngere and planned to build its workforce here.

Young and Gadsdon would continue to be involved in the operation of the business.

“Vitality Brands is a perfect fit for Essano,” Young said.

“In addition to our companies’ shared values and commitment to delivering the highest quality, value-for-money products for our loyal customers, along with our strong transtasman sense of family, [this move] allows us to grow market share in the beauty sector globally.”

Essano co-founders Shane Young (left) and Anthony "A.J." Gadsdon.

Before starting the beauty business in 2000 in their 20s, Young was a barber in Auckland’s Ponsonby and Gadsdon worked for grocery owner Progressive Enterprises, now Woolworths New Zealand.

When Pencarrow bought a 50 per cent stake in Essano’s holding company Mix Global Holdings in 2017, it had an annual turnover of $50m and 80 staff.

It outlined a compound annual growth rate - the mean of a company’s growth rate per year - of 36 per cent.

Essano's Auckland factory in Māngere will continue operating after the acquisition.

A Pencarrow note on their business in 2020 relayed its humble beginnings. Young was making hair wax in his flat in St Mary’s Bay and the pair grew the product until it was stocked in 6000 stores across New Zealand and Australia.

“The timing was really great,” Gadsdon said in the note.

“David Beckham had a mohawk at the time, so all the young guys were getting into that. And it just fitted perfectly with what we were doing with the hair wax.”

Madison Reidy is the host of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.