Record number of beauty acquisitions made in first quarter of 2018
There has been a record rise in mergers and acquisitions (M&A) in the global beauty and personal care market, with 35 deals completed in the first quarter of 2018.
The biggest activity has been in skincare, where there have been nine branded acquisitions, most which have been a natural proposition, according to data from the UK M&A advisory business of Alantra (previously known as Catalyst Corporate Finance).
This figure is up exponentially from the same period last year, where 21 deals were made in Q1 2017.
Key trends that have underpinned the activity include differentiation through technology, an example being L’Oréal’s acquisition of Canadian augmented reality company ModiFace to supplement its product and service offerings; and the growth of “fast beauty” – with the leading beauty players ramping up their pace and ability to react to the latest consumer demands.
The other big trend has been the natural and organic beauty movement. For example, P&G made two acquisitions with a strong natural proposition – native deodorants and Snowberry skincare. Plus, Unilever acquired Schmidt's body care, and Groupe Rocher acquired social selling natural beauty business Arbonne.
This followed three years of similarly high activity, with 85 deals announced in 2017, 90 in 2016 and 2015 respectively, the company's research found.
M&A levels and company valuations have increased as trade corporates look to brands that are growing quickly in modern channels or evolving product categories.