Throughout 2023, beauty dealmakers were faced with one of the most challenging market environments in over a decade. Dealmaking bottomed out in Q3, when the BeautyMatter Deal Index tracked only 50 deals during the quarter and a record 10 bankruptcies and shutdowns. Activity picked up substantially, however, in Q4, perhaps an indication of a pent-up deal pipeline and renewed optimism as we head into 2024.For the full year 2023, the BeautyMatter Deal Index tracked 258 deals, a 23.2% decline versus the 336 tracked in 2022. The Index also tracked a record-shattering 28 bankruptcies and shutdowns during the year, more than those tracked in 2020, 2021, and 2022 combined, with 18 tracked in the back half of 2023. Deal activity in the first half of 2023 was weak, down 36% year over year, but Q4 helped salvage the back half of the year. During Q4, the BeautyMatter Deal Index tracked 84 deals, a 12.0% increase from last year. As a result, deal activity in the back half of the year was only down 5.0% versus last year. Q4 was unique in that most of the beauty deal activity was M&A related versus growth investments, which typically dominate activity. 49 deals, or 53.3% of deal activity, were M&A related, a 69.0% increase over last year. This was likely driven by a few factors: investors reaching their hold timelines on deals done pre-pandemic and looking to get some liquidity; valuation expectations among owners becoming somewhat more rational and better reflecting market conditions; strategics using their formidable balance sheets to grow their portfolios; and continued uncertainty going into 2024, making deals more compelling for sellers.