In Brands, Finance

Q3 is the quarter for billion-dollar deals and Estée Lauder just upped the ante with the largest purchase in the 70-year history of the company, acquiring Too Faced for $1.45 billion. Lauder is making its mark in the millennial specialty and digital landscape through the acquisition of Becca last month and now, Too Faced. These fast-growing millennial-loving brands fit nicely into Lauder’s current color portfolio grounded in “makeup artist” brands MAC, Smashbox, and Bobbi Brown.

WHO: Created in 1998 by Jerrod Blandino and Jeremy Johnson, who worked behind the counter for Estée Launder in Southern California. The ultra-feminine, irreverent names and high-quality, innovative formulas have proven to be a recipe for success. With 7.8 million followers on Instagram and 7.3 million followers on Facebook, Lauder has earned an authentic relationship with millennials that has fueled the brand’s growth at retail.

IN THEIR WORDS: Fabrizio Freda, President and Chief Executive Officer noted, “The acquisition of Too Faced is complementary to our portfolio of brands because it has a unique feminine and Millennial communication focus, which is really complementary with very little cannibalization with the rest of our makeup portfolio.”

DETAILS:

  • Estée Lauder acquires Too Faced for $1.45 billion.
  • Too Faced is expected to reach more than $270 million in net sales in 2016. This represents growth of more than 70% for the year and 60% compounded annually over the past three years.
  • General Atlantic took a majority stake in Too Faced in June 2015 at a valuation of about $500 million.  That valuation increased nearly threefold over the past 18 months.
  • In 2015, majority owner private equity firm Weston Presidio Capital put the brand up for sale. There were rumors of Estée Lauder’s interest at that time but ultimately the brand sold to General Atlantic.
  • In 2012, founders Jeremy Johnson and Jerrod sold a majority stake to San Francisco–based Weston Presidio for $71.3 million.
  • Too Faced CEO Eric Hohl will report to John Demsey, Executive Group President. Too Faced will be added to the portfolio of brands he oversees  at Estée Lauder.
  • The Estée Lauder Companies Inc. received financial advice from Evercore and BNP Paribas, and legal counsel from Lowenstein Sandler LLP.
  • Too Faced received financial advice from Goldman, Sachs & Co. and Jefferies LLC, and legal counsel from Paul, Weiss, Rifkind, Wharton & Garrison LLP.

Read the press release on Business Wire.

Photo: @toofaced Twitter

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