Private equity giant TPG seems to be ramping up in beauty.
The firm, which has backed E.l.f. Beauty and Beautycounter through its growth segment, recently took a minority stake in skin-care business Rodan & Fields, which industry sources estimated could have cost around $500 million. Now sources have indicated the firm is nearing a deal for a minority stake in Anastasia Beverly Hills — the largest cosmetics company to hit the auction block in years. If true, sources said that could mean another $500 million check — putting TPG at roughly $1 billion in beauty investments in a matter of weeks.
TPG declined to comment when asked if it was investing in the business. Anastasia Soare, the founder, did not immediately return requests for comment.
Sources told WWD that Anastasia hired Imperial Capital to look into doing a deal in December. Then, business had about $340 million in net sales, and $200 million in earnings before interest, taxes, depreciation and amortization, according to industry sources. Sources indicated that strategic buyers looked at the business, but passed on the deal because of valuation expectations — said to be as much as $3 billion.
The Anastasia auction ramped up after several other large cosmetics deals closed. L’Oréal paid $1.2 billion to buy IT Cosmetics in July 2016, and Estée Lauder paid $1.45 billion for Too Faced in November.
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Those deals happened during a rapid growth phase in U.S. prestige color cosmetics — but that growth in makeup has softened — and sources say Anastasia Beverly Hills’ growth rate has also slowed in recent months. For the first quarter of the year, the U.S. prestige makeup market was up 7 percent, according to The NPD Group.
Soare is largely credited with putting eyebrows on the beauty map. In 2014, the brand branched into other color products, including the popular Modern Renaissance palette. Today, the brand has a full line of brow products, brushes, highlight and contour kits, eye shadows and lip colors. Anastasia is sold at prestige retailers, including Sephora, Ulta Beauty, Macy’s Inc. and Nordstrom.