In a noteworthy move, Ares Management is providing a $1.6 billion private credit financing to support the merger between Suave Brands Company and Elida Beauty. This deal underscores the increasing influence of private credit in major consumer-sector transactions. The combined entity, Evermark, will house a portfolio of prominent household brands encompassing skincare, haircare, and personal hygiene products.

This financing facilitates the combination of the two businesses, both owned by Yellow Wood Partners. Yellow Wood acquired these brands from Unilever in 2023 and 2024. The deal reflects a broader trend of private equity firms opting for private credit over syndicated loans and public markets to fund acquisitions. The personal care market is seeing a lot of M&A activity.

Ares, with approximately $595 billion in assets under management, is executing the financing through its U.S. direct lending platform. Karen De Castro, a partner at Ares Credit, expressed enthusiasm about partnering with Evermark. This transaction points to the continued growth and strategic importance of private credit within the financial sector.

The increasing reliance on private credit indicates a shift in how large transactions are structured and financed. Private credit offers flexibility and often quicker execution compared to traditional financing routes. Investors should watch how Evermark integrates the brands and performs in the competitive personal care market.