SECTOR DEALS OF THE WEEK: The Year of the Strategic Beauty Care Buyer


With the announcements last week of Coty acquiring ghd and Estee Lauder acquiring BECCA Cosmetics, we think that 2016 can be officially declared the “Year of the Strategic Beauty Care Buyer.” At no point in the last decade has there been so much simultaneous strategic interest in the beauty care sector. While there has always been a long list of strategic acquirers in the sector, typically strategic buyers have entered and exited the M&A game at different points in their particular acquisition cycles, leaving only a few acquisition parties at any given time. The notable exception is L’Oréal which seems to be acquisitive every year.

However, 2016 has been a different story.  To date, we have already witnessed multiple beauty care deals from L’Oréal, Estee Lauder, Unilever, Johnson & Johnson and Coty. We also saw acquisitions by Revlon, Conair, Henkel, Nestle Skin, Godrej and, for the first time since 2010, Shiseido.

While we anticipate that certain strategic buyers will make a few acquisitions and then retreat to integration as in prior cycles, we believe that we are still in the early innings of this wave of strategic acquirers and could see strong activity across a broad set of buyers through 2017, and potentially into 2018. In addition, we believe other strategic players who have been silent in recent years, such as Kao and Kose, will ultimately rejoin the M&A mix.

Set across the backdrop of a very aggressive private equity landscape, it is a great time to be an owner of an independent beauty care brand.