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M&A activity hots up as the US economy improves

By Simon Pitman+

03-Sep-2014
Last updated on 03-Sep-2014 at 17:08 GMT

As many of the leading cosmetics and personal care players emerge from the economic downturn relatively unscathed, it seems that now looks like a good time to go corporate shopping.

Big players such as L’Oréal, Estée Lauder, Unilever and P&G have all emerged from the downtown relatively unscathed, which means there are funds in the war chest and acquisitions could happen if the right opportunities present themselves.

This article highlights a number of recently published articles on Cosmetics Design USA that highlight the trend, some of the biggest acquisitions that have taken place of late, and some of the key emerging brands in the US that might catch the buyers’ eye.

The brands to look out for

Over the years some of the most promising brands have been snapped up by bigger players and in turn investment has turned them into cosmetic powerhouses, Estée Lauder’s acquisition of MAC providing a perfect example of this.

Some of the most important emerging brands currently on those shopping lists are likely to be highlighted in this recently published article, Top Ten Emerging Beauty Brands.

The article profiles names such as Brad Biophotonic, Yes To, Zo, Josie Maran, Luxury brand partners and Dr. Bronner’s as being some of the most likely acquisition targets.

Who’s buying what right now

Although all the indications are that M&A activity could be set for a spike, in recent months activity has been relatively quiet, with perhaps the biggest deal to be sealed in recent months being L’Oréal’s acquisition of the NYX color cosmetics brand back in June of this year.

Beyond that, competitor Estée Lauder has also made it clear that it is in a position to buy new businesses, should the brand fit.

Having recently announced that year-on-year sales were up by 13% for the period ending June of this year, company CFO Tracey Travis says M&A activity is a high priority for Estée Lauder .

M&A activity to look out for

Right now there are several big deals in the making, with both Botox-maker Allergan and under-performing Elizabeth Arden both being the target of investors.

Right now executives at Elizabeth Arden are said to be mulling a tender off from private equity investors Rhône Capita l, which could provide the company with much needed investment funds.

Meanwhile, executives at Allergan are fighting a hostile take-over bid by consumer and pharmaceutical giant Valeant, which is currently been hard fought in the courts.

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