In Exclusives, Finance, Trend

In recent years it seems everything has been getting bigger—the investments, the deals, and without question, the exits. It used to be that billion-dollar exits were a rare event. Now the goal of beauty start-ups is unicorn status before even contemplating an exit. Activity in Q2 remained steady with Avon finally sealing the deal on new ownership and Edgewell Personal Care acquiring Harry’s for a reported $1.37 billion valuation.

Overall, it remains a seller’s market, and has been one for the past 10 years, noted John Potter, US deals sector leader at PwC. Potter told WWD that trends fueling deals include companies looking to “buy assets to increase their capabilities, and/or bringing into the portfolio brands that consumers want as well as [adding assets] to build scale.”

Q2 Trends:

  • Activity on the supply side continues at a rapid clip—businesses entering adjacent markets, acquiring key technology, increasing scale, and establishing a presence in fast-growing markets and categories.
  • This quarter saw CBD and hemp go from trend to a Wild West land grab in the pioneering industry. As retailers from luxury to mass take a plunge into the category, investors are following suit. While questions still remain around product, claims, legality, and more, investment in the space is booming. Established cannabis companies like Canopy Growth are fast-tracking penetration into the beauty and wellness categories through acquisition of established brands. And on the other end of the spectrum, start-ups being funded in the niche category continue with a fast clip.
  • As the beauty, health, and wellness industries have converged over the past several years, the supplement business has gone along for the ride. Brands like Olly saw the white space for disruption, and now strategics are adding these new supplement disrupters to their portfolios. Private equity and venture capital are making their bets on brands with growth opportunity in the category, with Needed, Astura and 8Greens all receiving capital investments this quarter.

In The Works?

  • The rumors of talks between Kylie Cosmetics and Coty are rampant. According to WWD, Kylie Jenner might be in talks with the conglomerate for a stake of 51% or higher. It’s reported that Kylie is looking at a minimum of $600 million for the potential deal.
  • Rumors of a billion-dollar sale of Drunk Elephant started in the beginning of the year as word hit the street that the brand was working with investment banks Financo LLC and Moelis & Co. In May, rumors that Unilever was offering $1 billion for the brand surfaced.

Inside The BeautyMatter Q2 Report: 

  • 57 transactions captured across the beauty landscape
  • Compilation of  Q2 transactions with full transaction insight
  • Easy to reference chart including transactions by category with high level details and the financial players involved.

We’ve put in the time and done the work for you. Purchase the BeautyMatter Beauty Deals: M&A Transactions Q2 2019 here.

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