Happi Staff11.21.20
COVID-19 has changed the way consumers shop for beauty; turns out it may have changed the way investors shop for beauty companies as well. Industry observers insist that mergers and acquisitions in the beauty space will heat up in 2021. Brands that could be acquired next year include Aroma-Zone, Bios Line, Manscaped, Dude Products, Dr. Squatch and Function of Beauty.
When an indie beauty brand gets snapped up for half a billion dollars or more, everyone takes notice. For years, multinationals jumped at the opportunity to acquire startups that showed tremendous growth or even just tremendous potential; but the big payoff for indies may be coming to an end as the traditional beauty model gets battered by coronavirus. Industry analysts say suitors want to see profitability before opening their coffers. As a result, valuations are shifting from revenue-based multiples to profit-based multiples.
M&A works both ways and several multinationals are mulling the sale of brands and business units. Henkel, Reckitt Benckiser, Shiseido and Unilever have all considering selling brands that don’t match their corporate portfolio or their corporate performance. They’ve all seen how well Procter & Gamble has fared since convincing Coty to acquire a basket of brands for $12 billion. Most recently, industry sources say Estée Lauder may put its hair and makeup brands on the selling block. With so many properties, big and small, for sale, supply may be outstripping demand, which could mean some beauty brands will be available at bargain rates.
When an indie beauty brand gets snapped up for half a billion dollars or more, everyone takes notice. For years, multinationals jumped at the opportunity to acquire startups that showed tremendous growth or even just tremendous potential; but the big payoff for indies may be coming to an end as the traditional beauty model gets battered by coronavirus. Industry analysts say suitors want to see profitability before opening their coffers. As a result, valuations are shifting from revenue-based multiples to profit-based multiples.
M&A works both ways and several multinationals are mulling the sale of brands and business units. Henkel, Reckitt Benckiser, Shiseido and Unilever have all considering selling brands that don’t match their corporate portfolio or their corporate performance. They’ve all seen how well Procter & Gamble has fared since convincing Coty to acquire a basket of brands for $12 billion. Most recently, industry sources say Estée Lauder may put its hair and makeup brands on the selling block. With so many properties, big and small, for sale, supply may be outstripping demand, which could mean some beauty brands will be available at bargain rates.