Beauty Care M&A Regains Momentum

Beauty Care M&A ended the year showing signs of increased momentum, closing Q4’23 with 25 transactions, a 19% increase from a depressed Q3’23 and a 17% decrease from Q4’22. Despite a volatile year and continued macroeconomic uncertainty, 2023 finished with over 90 Beauty Care M&A deals, representing a 16% decrease from 2022 largely driven by a significant reduction in strategic buyer activity.

Despite a reduction in strategic buyer M&A activity throughout the year, several high-profile transactions were announced in Q4’23, highlighted by Shiseido’s acquisition of Dr. Dennis Gross Skincare for $450 million, Unilever’s acquisition of K18, and Amorepacific’s acquisition of an additional 55% of CosRx for $560 million. Strategic sell-side activity also remained high with the sale of Dollar Shave Club and Elida Beauty Group by Unilever, Sanoflore by L’Oréal, and The Body Shop by Natura & Co.

Notable private equity transactions included the acquisition of Elida Beauty Group by Yellow Wood Partners, the acquisitions of MAV Beauty Brands and a 65% stake of Dollar Shave Club by Nexus Capital Management, the acquisitions of Alpha Skincare and Pure Brazilian by Silber Equity, and minority investments in Odele by Stride Consumer Partners and Blankme by L Catterton.

Despite continued industry headwinds including recessionary fears from both buyers and sellers as well as high bars for consumer discretionary investments, Intrepid believes that Beauty Care M&A deal volume will continue to gain momentum in 2024 as sellers begin to emerge from the sidelines.

Q4’23 Beauty Care M&A highlights include:

• Deal volume was up 19% from Q3’23 and down 17% from Q4’22.
• Strategic buyer activity was highlighted by Shiseido’s acquisition of Dr. Dennis Gross Skincare, Unilever’s acquisition of K18, and Amorepacific’s acquisition of CosRx.
• Strategic buyers continued to be sellers including divestments from Unilever, L’Oréal, and Natura & Co.
• Private equity remained active with deals announced by Nexus Capital Management, Yellow Wood Partners, Stride Consumer Partners, L Catterton, and Silber Equity.
• Increasing M&A activity and consolidation in the MedSpa sector.
• Continued venture capital activity from institutional investors as well as strategic venture funds.