L’Oréal has continued its buying spree, adding the makeup artistry brand NYX Cosmetics to the fold.
The beauty firm on Tuesday signed a definitive agreement to acquire NYX. The terms of the deal were not disclosed, but industry sources estimate that L’Oréal may have paid nearly $500 million for the mass-market cosmetics brand. News of the deal confirms a report that appeared in WWD on June 12.
NYX, which was founded in 1999 by Toni Ko, has garnered quite a bit of attention in recent years for its social media prowess and meteoric sales growth. The brand’s sales for the 12-month period ended May 31 surged 57 percent to $93 million. The double-digit growth was on top of a stellar performance in 2013, when sales gained 46 percent to $72 million.
NYX, which is often described as the “MAC of mass,” is sold in mass and specialty stores, such as CVS Pharmacy, Target and Ulta.
“NYX is a dynamic company that has done a tremendous job of harnessing the power of social media, digital marketing and multichannel distribution,” stated Frédéric Rozé, president and chief executive officer of L’Oréal USA. “Both L’Oréal and NYX share a passion for innovation and a confidence in the strength and vitality of the color cosmetics market.”
The brand will become part of the mass-orientated Consumer Products Division of L’Oréal, which also houses L’Oréal Paris, Maybelline New York, Garnier, SoftSheen-Carson and Essie.
NYX will continue to operate out of its Los Angeles headquarters under its current management team, which is led by ceo Scott Friedman.
L’Oréal has been one of the most active beauty firms on the mergers and acquisitions front in recent years, and has shown an interest in investing in brands at various stages of their life cycle.
In April alone, L’Oréal completed the acquisition of Magic Holdings International Ltd., a maker of Chinese facial masks, and the purchase of Decléor and Carita from Shiseido Co. Ltd.
The French beauty firm also has a fondness for edgy brands with a track record for strong social media engagement. For instance, in 2012, L’Oréal purchased Urban Decay from private equity firm Castanea Partners for an estimated $350 million. The brand has flourished, driven in part by the success of its Naked eye-shadow palettes. Last year, L’Oréal launched a color cosmetics brand with YouTube sensation and makeup vlogger Michelle Phan called EM, which the company developed from scratch.
NYX, for its part, has amassed more than 730,000 followers on Instagram, more than 226,000 Twitter followers and north of 36,000 YouTube subscribers.
“NYX has seen tremendous growth in the last decade and I have complete confidence that L’Oréal will remain true to its brand identity and mission, which is to provide high quality, innovative professional cosmetics for women around the world,” stated Ko, chairman and founder of NYX, a Greek word for “goddess of the night.”
The deal’s closing is subject to regulatory approvals and conditions. Piper Jaffray served as the financial adviser to NYX.