E.L.F., which stands for eyes, lips and face, could fetch $200 million to $300 million in a sale, according to sources. The brand had hired investment bank Financo to advise on a sale. Private equity firm TSG Consumer Partners holds a minority stake in the brand. E.L.F. sells affordable cosmetics at retailers like Target Corp. The brand's lipstick and mascara cost around $3 each.
L'Oréal SA previously looked at buying E.L.F. but decided to acquire makeup brand Urban Decay instead last year, the sources said.
Mergers and acquisitions in the beauty sector have been relatively quiet in recent months, though large deals have included L'Oreal's acquisition of Chinese facial mask brand Magic Holdings for $845 million, and Revlon Inc's $660 million acquisition of salon hair care products company the Colomer Group.