Moelis & Co. has been hired to sell Amway’s Laura Mercier and RéVive brands, according to industry sources. Moelis declined to comment.
Strategic buyers, such as Estée Lauder or L’Oréal, and private equity companies are both considered likely potential buyers, sources said, but the latter firms may be deterred by the report of a $300 million price tag, one source said.
Together, Mercier and RéVive generate $175 million in sales, with Laura Mercier bringing in about $160 million and RéVive adding about $15 million, according to one industry source. The makeup and skin-care brands comprise Gurwitch Products, a business that then-majority owner Neiman Marcus sold to Amway in 2006. Amway owns Artistry skin care and makeup, Satinique hair care and Glister toothpaste.
Industry observers generally view the prestige brands as incompatible with Amway. An Amway spokeswoman declined to confirm or deny the reports.
Related Galleries
While many beauty companies are hot M&A commodities, Laura Mercier may be a tough sell, sources said. One market executive said problems arose when Amway integrated Laura Mercier’s distribution into its own and a disconnect between divisions caused problems with on-time deliveries and keeping items in stock. “There have been efforts made to fix it over the past year, but the business barely makes money,” one industry source said.
Ironically, those issues could make the brands more attractive to private equity firms, which are looking for properties where they can add value. A private equity business could potentially acquire the brands, iron out the profitability problem and then sell to a strategic buyer, sources said. “It might be a financial buyer who buys it because they see an opportunity to give a kick in the butt to a sleepy brand,” an industry source speculated.
Cosmetics and skin-care businesses have been attractive M&A targets recently. Encore Consumer Capital bought a stake in makeup brand Lorac in December, and Coty has agreed to purchase 41 beauty brands from Procter & Gamble.