Thousands of deals were announced globally through 2012, and this level of confidence and activity in M&A continues apace into 2013 as exemplified by Valeant’s acquisition of Ambi Skincare Products from Johnson & Johnson and Acne Free from University Medical. Similarly, Valeant has recently announced it is acquiring outstanding Obagi stock for $360 million. Other noteworthy activity includes Markwins International acquiring Physicians Formula for $75 million and Dr. Fresh acquiring the Reach brand of toothbrushes from Johnson & Johnson. Yellow Wood Partners private equity firm acquired Parfums de Coeur, a previously privately-held company, for an undisclosed sum. Furthermore, L’Oréal’s CEO Jean-Paul Agon announced early this year that he is willing to make an important acquisition in 2013 to maintain growth.
Clearly, companies continue to emphasize growth agendas and make significant funding available to realize such aspirations. Such an improving environment is increasingly attractive for M&A and a growing number of smaller cosmetic and toiletry companies are contemplating, developing, and/or executing exits. As such, 2013 portends to offer even greater deal flow as many companies look to invest in new growth opportunities.
Kline’s Minor Companies chapter from the Cosmetics & Toiletries USA report, consisting of a collection of almost 150 profiles of smaller, often privately held cosmetic and toiletry companies, reveals that some particularly interesting companies we have identified are positive net value prospects, as well as presently competing in segments that are estimated to post higher than industry-average growth.
Some examples are:
- The New York City-based Anthony Brands specifically targeting the needs of men and, more recently, women. High potential based on: solid presence in male grooming market, and high level of innovative product launches.
- Dermalogica has approximately 120 skin care products for take-home and professional use. High potential based on: domestic position in spas and hair salons with aesthetic services, as well as global reach.
- Vogue International distributes hair care and other personal care products in nearly 42 countries worldwide. High potential based on: prolific R&D, mass brands with broad appeal; recognized name. It was rumored in January 2013 that Vogue had its Organix brand up for sale.
- Yes To Inc, manufacturer and distributer of natural face, body, and hair care products was founded in 2006. The company’s headquarters and production facilities were moved to San Francisco, CA, from Israel in 2010. High potential based on: rapid growth in recent years; truly natural products; clear, unique positioning; multi-category placement; accessible price points.
- Headquartered in Port Washington, NY, Kiss Products is a private manufacturer and distributor. Fashion nails and “decorated wear” nails are the company’s key area. High potential based on: company’s impressive growth; solid foothold in the fast-growing nail care segment.