Beauty Care M&A volume dropped 30% from the positive uptick in Q2’23 and 16% from Q3’22. With only 21 transactions, Q3’23 highlights the continued slowdown of beauty M&A, ranking the second lowest volume quarter over the last three years.
Despite minimal M&A activity, the quarter saw headline strategic deals including e.l.f Beauty’s acquisition of Naturium and Kao’s acquisition of Bondi Sands. The quarter also witnessed activity from increasingly active strategic investment arms such as Rhyz, the investment arm of Nu Skin, and Pierre Fabre Invest, the investment arm of French pharmaceutical group Pierre Fabre Laboratoires. L Catterton led private equity activity for the quarter completing three minority investments as well as participating in a Series C funding round amidst a flurry of beauty care venture capital deals.
Lastly, Q3’23 continued to add to what is becoming record high volumes of Beauty Care bankruptcy activity in 2023 as Amyris filed for Chapter 11 protections as well as continued strategic divestiture activity including Unilever’s announced plans to continue to divest non-core beauty brands with the sale of Elida Beauty as well as Natura & Co.’s announcement to explore a potential sale of The Body Shop.
Inflationary pressures and continued macroeconomic uncertainty continued to drive a slowdown in Beauty Care M&A volume in Q3’23. However, Intrepid believes that the Beauty Care M&A market will prove resilient for high-quality, rapidly growing brands and that the market will start to gain positive momentum in Q4’23 and throughout 2024.
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Q3’23 Beauty Care M&A highlights include:
• Deal volume was down 30% from Q2’23 and 16% from Q3’22.
• Strategic activity remained strong with headline deals from E.l.f Beauty (Naturium) and Kao (Bondi Sands) in addition to investments completed by multiple strategic investment arms.
• Private equity remained active with L Catterton leading the quarter with three minority investments (Irene Forte Skin, Maria Nila, and Eighth Day) as well as participating in a flurry of venture capital investments by leading a Series C funding round (GlossGenius).
• Continued M&A activity in the Beauty Care contract manufacturing sector.
• Strategic acquirors continued to consider divestitures of non-core beauty brands.
• Increasing number of Beauty Care bankruptcy filings.