Top cosmetic manufacturer mergers and acquisitions of 2016
It has been a busy year for M&A activity for both cosmetics brands and manufacturers, with big deals being brokered that increase the global footprint of some of the biggest players.
L’Oréal, Unilever, Henkel and Coty have brokered some of the highest profile deals during the course of 2016, all serving to consolidate and expand their portfolios.
In this article we look back at some of the most significant deals, highlighting what they mean for the industry and how they advance those businesses.
Coty acquires ghd
Back in October Coty announced that it was expanding its international footprint yet further with the acquisition of Good Hair Day (ghd), a UK-based company specialising in hair straighteners and appliances.
The transaction is a cash offer and will be funded by a combination of Coty’s own cash reserves and available debt facilities and will add to Coty’s revenues as soon as the deal is closed.
Started by three British hairdressers, ghd has grown to become one of the biggest global players in the hair straightening and appliance category, a competitive area that has seen massive growth in the last few years.
The company generate a revenue of £178 million in 2015 from markets such as the UK, Australia, France, Germany, and the U.S, so the cash offer is in line with many similar acquisitions in the beauty space, whereby high-growth players are being sold for approximately three times their annual revenue.
The deal caps an amazing run of investment for Coty, which has now elevated it to the rank of third biggest multinational cosmetic and personal care player in the world.
Bellami aims big with hair brand acquisition
Bellami is aiming to become “one of the leading beauty brands in the world,” and the acquisition of color cosmetics company Mirabella is one small part of the plan, which includes retail stores, distribution partnerships, formulation updates, new leadership hires, and more.
Founded in 2012 by Julius Salerno and Nikki Eslami, Simi Valley, California– based Bellami bought two color cosmetics brands last month: Mirabella Beauty and Lipland.
“With the acquisitions of Mirabella and Lipland, Bellami now offers a full suite of beauty products including cutting-edge and professional cosmetic lines,” boasts the company in a media release.
Bellami is known for its success in the digital influencer space. Without abandoning its social media (YouTube, Instagram, etc.) roots, the company is set to grow in new directions.
Puig builds on its independent status
Puig, one of the most significant independent global fragrance players, has taken a minority stake in Granado, a Brazil-based storied pharmacy and owner of naturals brand Phebo.
The move is interesting because it gives Spain-based Puig a footing in the important Brazil market, while also giving the opportunity to expand the Granado and Phebo businesses, both nationally and internationally.
The Granado pharmacy business was established in 1870, and has established itself as a producer of high-quality natural-based preparations, focused on the fragrance, hair and skin care categories.
It purchased the Phebo brand in 2004, and has evolved to become a high profile glycerine soap and fragrance brand in Brazil, and increasingly overseas on the back of Granado’s international expansion.
Henkel invests in P&G hair care brands
The German manufacturer looks to target the hair care market in Eastern Europe, the Middle East and Africa, after acquiring a portfolio of brands from Procter & Gamble which all target these regions.
The transaction, which was first announced in April of this year, includes a portfolio of brands with leading positions in the entry-level price segment, with major brands such as Pert, Shamtu, and Blendax, all holding leading positions in the shampoo segment in these emerging markets; with sales in 2015 for the brands amounting to almost $100 million.
The hair care maker identifies Russia, Saudi Arabia and Turkey as the key countries to target and says that with the acquisition, it will expand its footprint in emerging markets and strengthen its position in some of the largest and fastest growing markets in Africa/Middle East and Eastern Europe.
Revlon firms up Elizabeth Arden
Back in September it became a done deal when Revlon confirmed the acquisition was successful and that the combined company—a “global beauty enterprise”–now operates with Revlon as the parent company and is traded on the NYSE as REV.
Announcing the news, Revlon highlighted these key brands within the newly combined company’s portfolio: Revlon, Elizabeth Arden, Revlon ColorSilk, Revlon Professional, and American Crew, as well as the fragrance brands: Juicy Couture, John Varvatos, Wildfox Couture, Curve, Elizabeth Taylor, Britney Spears, Christina Aguilera, Giorgio Beverly Hills, and Jennifer Aniston.
By acquiring Elizabeth Arden, Revlon gains (most notably) market reach and prestige brands. “We expect to benefit from greater scale, an expanded global footprint and a significant presence across all major beauty categories and channels,” affirms Fabian Garcia, president and CEO of the company, in a press release about the deal.
Unilever acquires Seventh Generation
The multinational CPG company announced in September that it had signed a deal to purchase the plant-based personal care and household cleaners company known as Seventh Generation—thereby shoring up its position in the naturals market.
Seventh Generation, based in Vermont, was a company ahead of the curve on natural (scalable) home and personal care products. The company got its start nearly 30 years ago, and was founded on the Iroquois principle that before making any decision, the best interests of the next seven generations should be taken in to consideration.
The biggest deal of 2016 – L’Oreal buys IT Cosmetics!
At the end of July the self-proclaimed world’s leading beauty company announced the signing of a deal to purchase skin care and makeup brand IT Cosmetics for over $1bn — validation of IT Cosmetics’ hard-earned reputation for innovation and consumer loyalty.
Subject, of course, to all the customary approvals and standard regulatory hurdles, the $1.2bn acquisition has been a topic of discussion in the trade as well as among consumers all weekend.
With a collection of products named to evoke possibility and positivity, the company site summarizes IT Cosmetics as a brand “developed with leading plastic surgeons.”
“IT Cosmetics creates clinically proven, innovative, problem-solving color cosmetics and skin care products that harness cutting-edge, anti-aging technologies and high performance, skin-loving ingredients to provide you with serious beauty solutions designed to give you the power to look and feel your most beautiful! IT’s truly your beauty, but better,” exclaims the company.
Unilever buys Dollar Club
Also in July, the Anglo-Dutch consumer goods giant expanded its footprint in the men’s grooming space with the acquisition of Dollar Shave Club, one of the fastest growing personal care businesses in North America.
The California-based company has risen to success by using an online subscription service that first started off supplying shaving products to men’s doors when it was founded in 2012.
In the course of the last year the company's portfolio has been successfully expanded to include both full skin and hair care lines and now has an estimated 3.2 million subscribers.
The acquisition means that Unilever will be extending its footprint into the all-important US personal care market, as well as the fast growing men’s grooming category, which in recent years has demonstrated above industry average growth off the back off significant product innovation targeting younger male consumers.
J&J expands into Japanese skin care with Dr. Ci Labo buy
The deal, which was announced in July, includes widespread sales rights to select products and is also meant to improve J&J’s prowess in the skin care sector.
The Japanese beauty brand Dr.Ci:Labo got its start in 1999 as a mail-order skin care company with a portfolio of just six products. Among that small collection was the company’s signature product, Aqua Collagen Gel. In December of last year the company had a corporate restructuring and Ci:z Holdings was born.
According to Nikkei, J&J is buying up nearly 20% of the Ci:z Holdings entity.