Beauty Care M&A volume has officially rebounded to pre-pandemic levels with 30 transactions in Q2’21. Such levels represent a 3.4% increase over Q1’21, a whopping 50% increase over pandemic ravaged Q2’20, and a 15% increase over pre-pandemic Q1’20. What a difference a year makes!
The quarter was dominated by private equity activity ranging from majority buyouts such as Carlyle’s investment in Beautycounter to a long list of minority growth investments including deals by leading beauty care heavyweights Berkshire Partners, Eurazeo Brands, KKR, Norwest Venture Partners, Bain, TPG Growth, and General Atlantic.
The quarter was not however void of strategic buyer activity. Most notably, Unilever announced the $2 billion acquisition of Paula’s Choice and The Hut Group continued its vertical integration strategy with the acquisition of Bentley Labs, while Helen of Troy announced the divestiture of its mass personal care brands. In addition, the public markets remained open for beauty care companies with the IPO of Revolution Beauty and a host of anticipated beauty care IPOs in the second half of the year.
Intrepid anticipates continued strength in the Beauty Care M&A markets for the remainder of 2021. Such momentum will be driven by strong underlying beauty care and M&A fundamentals, continued rebound and remaining backlog from the COVID-impacted slowdown in 2020, and the acceleration of M&A resulting from the anticipated capital gains tax increases in 2022.
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Q2’21 Beauty Care M&A highlights include:
- Deal volume was up 3.4% from Q1’21 and 50% over the peak pandemic period in Q2’20.
- The Beauty Care M&A market witnessed more billion dollar deals, with two deals over $1 billion during the quarter (following three in Q1’21).
- Private equity groups dominated M&A headlines representing the overwhelming majority of high profile transactions in the quarter.
- Early stage venture capital financing and initial public offerings continued to impact the Beauty Care M&A markets.