What Drives Value in Beauty and Personal Care M&A

Nov 7th, 2017

Audrey Latimer

According to CEW, over 344 global M&A deals have been completed in the beauty market since 2011.

With the momentum of beauty M&A showing no sign of slowing down, CEW and Baylor Klein hosted a mentoring event, "Beauty Brand Makeover Tips: What Drives Value in M&A," on October 12, 2017. During the event, managing director of Baylor Klein, Tim Leach, shared his views on what the primary drivers are in buying.

What buyers and investors are interested in...

Brands capitalizing on new trends and focusing on fast-growing areas in the beauty and personal care industry
Brands with having gross margins of more than 70% and a strong channel strategy
Product safety documentation and supply chain resilience especially when dealing with natural brands

Leach was quoted saying that the current market is "a really exciting time to create and own a brand."

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Dermatological beauty sales spiked nearly 22% like-for-like to 2,015.9 million euros, while luxe results grew more modestly at 1.8% like-for-like to 3,813.0 million euros.

In hair care, organic sales jumped in the high single digits due to pricing increases in North and Latin America and Europe.

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Sephora continues to be a powerhouse, spiking selective retail sales by 11% (organic), totaling $4,175 million.

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Highlights in the perfume and cosmetics sector included Christian Dior's Sauvage, J’adore and Miss Dior in fragrance, as well as Rouge Dior in makeup and Capture in skin care.

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'Immunocologie is your skin care’s foundation for well-being, healthy skin,' says Immunocologie Skincare founder, Karen Ballou. 'Consequently, Immunocologie’s holistic approach to skin health is consistent with Blue Zones principles of living better longer.'

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As part of the partnership, select Immunocologie products (the Vital Clay Mask, Vital Ionic Mist and self-heating Lava Mask) have been featured online alongside other Blue Zones-endorsed products including longevity foods and beverages.

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Cyklar founder Claudia Sulewski said, 'I was a longtime fan of The Center's brands and couldn't believe my luck when I hit it off with Ben Bennett. Joining this family is a dream come true, and I'm eager to learn and grow Cyklar with their expertise.'

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U.S. private equity giant Blackstone Inc. would reportedly try to provide debt financing to take L’Occitane private.

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Reuters now reports that Geiger is "in advanced discussions with investors and lenders" about a potential deal that could be announced in just a few days.