Long-established personal care products company Edgewell scoops up razor ecommerce starlet Harry’s Inc. in the second major direct-to-consumer razor acquisition in three years.

Edgewell Personal Care Company, parent company of Schick razors, announced today it will acquire razor startup Harry’s Inc. for $1.37 billion.

The merger will give Edgewell access to Harry’s ecommerce intelligence and a more diverse set of consumers, while Harry’s gains access to Edgewell’s research and development, supply chain and global scale, Edgewell said in a release announcing the acquisition. Harry’s co-founders and co-CEOs Andy Katz-Mayfield and Jeff Raider will serve as co-presidents of U.S. operations at Edgewell. The deal is expected to close by the end of the Q1 2020.

“Building on Edgewell’s and Harry’s complementary strengths, our combined company will have leading brands and omnichannel capabilities that are essential to meet the needs of the modern consumer and win in today’s market environment,” Rod Little, Edgewell’s CEO said in the release.

The deal exemplifies that consumer packaged goods brands need direct-to-consumer brands to capture ecommerce sales, says Patrick Tripp, vice president of product strategy at customer data vendor RedPoint.

“Selling directly to consumers is something large CPG companies have struggled with,” Tripp says. “Large CPG brands that want to survive—and thrive—will need to upend the existing engagement model, tapping into the established relationships DTC brands have built with consumers.”

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Harry’s launched in 2012 as a web-only merchant that manufactured its own razors and sold them directly to consumers at Harrys.com. The digitally native, vertically integrated brand has posted explosive online sales growth in these six years and has also started selling in Target Corp. and Walmart Inc. physical stores and online retail sites.

Harry’s generated $269.1 million in 2018 online sales, which is a 38% increase over 2017 web sales of $195.0 million, according to Internet Retailer estimates. Its five-year compound annual growth rate in online sales is a whopping 195.2%, well above the Top 1000 five-year median CAGR of 18.5%, according to Top500Guide.com. Harry’s is No. 197 in the just-released Internet Retailer 2019 Top 1000 and has raised $375.2 million in venture capital, according to Crunchbase.

Edgewell already owns several well-established personal care brands, including Playtex, o.b., Banana Boat and Hawaiian Tropic, as well as shaving brands Schick, Skintimate, Wilkinson Sword, Edge and Personna.

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This is not Edgwell’s first foray into ecommerce, as it launched its first direct-to-consumer site in the U.S. for its Hydro Connect razor at Schickhydro.com. Since then, it has launched Schick.com and has redirected the hydro link to this site as well. Edgewell also sells products on Amazon.com Inc.

This deal echoes that of shaving supplies subscription service Dollar Shave Club, which launched in 2011 and was acquired by consumer packaged goods giant Unilever in 2016. Terms of that deal were not disclosed but were widely reported to be for $1 billion in 2016. Dollar Shave Club is No. 160 in the Top 1000, with $325.13 million in web sales, according to Top500Guide.com.

Here’s how the top grooming retailers stack up by online sales via their own ecommerce sites. This excludes online sales via wholesale arrangements such as on Target.com or via marketplaces such as Amazon.com Inc.

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