As highlighted in our Q2’20 Intrepid Beauty Care M&A Report, M&A volume within the Beauty Care industry remained depressed in Q3’20, down 32% from Q3’19 and 5% from Q2’20. The continued softness in the Beauty Care M&A markets in Q3’20 was driven primarily by the significant disruption of M&A processes in Q2’20 related to the onset of the global pandemic and resulting business closures and stay-at-home orders in April and May.
The Beauty Care M&A markets however were once again resilient with 19 transactions in the quarter, down only seven deals from pre-pandemic levels in Q1’20. In addition, the quarter witnessed continued strategic acquirer activity including Beauty Care M&A transactions announced by Edgewell, Henkel, and The Hut Group. While the traditional private equity markets were quiet in Q3’20, the quarter saw the re-emergence of private equity-backed Beauty Care platforms including General Atlantic-backed FORMA Brands and investments in Beach House Group by Monogram Capital Partners and Present Life by The Craftory.
Furthermore, despite softness in quarterly volume levels, the market is already in the process of a material rebound with the re-engagement of select M&A processes previously on hold, the launch of new processes, and increasingly active interest from both strategic and private equity acquirers. The rebound in activity has been exacerbated by the lack of completed deals in the last two quarters and both buyers and sellers gaining comfort with the new normal logistics of virtual management presentations and online meetings. Barring further business shut-downs or a reinstatement of stay-at-home orders, Intrepid expects a significant rebound in Beauty Care M&A deal volume in Q4’20 and early 2021.
Q3’20 Beauty Care M&A highlights include:
- Deal volume was down 32% from Q3’19 and down 5% from Q2’20.
- Strategic acquirers led the quarter with deals announced by Edgewell, Henkel, and The Hut Group while traditional private equity activity was quiet.
- Private equity-backed Beauty Care platforms re-emerged with the formation of FORMA Brands and investments in Present Life and Beach House Group.
- Continued consolidation and increasing M&A activity in the Beauty & Personal Care contract manufacturing sector.