PAI Partners strikes €330mn deal for Italian haircare group Beautynova
Private equity group will acquire majority stake from Bluegem as beauty market remains buoyant
French private equity group PAI Partners is to buy a majority stake in professional hair products maker Beautynova as it seeks to capitalise on the buoyant beauty market.
Paris-based PAI will acquire a 51 per cent stake in Beautynova for about €330mn from consumer-focused private equity firm Bluegem.
Bluegem, which originally bought its 79 per cent stake in 2020 for €52mn, will sell its position to PAI and then buy back in for about 47 per cent.
Milan-based Beautynova brands include Medavita and Urban Tribe. The company also develops haircare products aimed at professionals for treatments, colouring and styling, with 18,000 formulas so far.
It had sales of €130mn in 2023 and earnings before interest, taxes, depreciation and amortisation of €30mn — valuing the company at a multiple of 11 to 12 times ebitda.
“Beautynova has evolved into a leading professional haircare platform, more than tripling its sales and experiencing substantial geographical expansion, with a particular focus on the US,’’ the private equity firms said in a statement on Monday. They plan to accelerate the growth of Beautynova across the US and Europe.
The deal is the latest in a string of mooted transactions in the beauty sector after private equity-owned German beauty retailer Douglas announced earlier this month plans to list in Frankfurt. Spanish luxury and beauty group Puig, which owns brands including Paco Rabanne and Charlotte Tilbury, said at the end of 2023 that it would explore a listing.
Following the transaction, Bluegem will retain a 47 per cent stake in the beauty company with the remaining 2 per cent held by Beautynova’s management.
The environment for private equity exits has been tough on both sides of the Atlantic as rising interest rates and market volatility have severely curtailed the market for listings. A report by consultancy Bain said private equity groups globally were sitting on a record 28,000 unsold companies worth more than $3tn.
However, the announcement of the Douglas listing, as well as Puig’s plans and UK buyout firm Permira’s exploration of a listing for luxury Italian sports shoe company Golden Goose, has raised hopes that the market is regaining momentum in Europe.
At the same time, demand for beauty products remains buoyant globally despite pressures on household spending and an uncertain outlook in China, the sector’s fastest-growing market. In the US — beauty’s biggest market — sales of high-end hair products were the fastest-growing category last year, with dollar sales up 24 per cent, according to consumer research company Circana.
Deals for beauty companies that cater to higher-spending consumers fetched substantial price tags last year despite the more subdued global dealmaking environment. French luxury group Kering’s€3.5bn acquisition of fragrance brand Creed fetched a multiple of about 23 times ebitda, while L’Oréal snapped up Aesop — the minimalist maker of high-end soaps — in a $2.5bn deal.
L’Oréal’s specialist beauty division, which caters to professionals and is largely focused on haircare, delivered €4.6bn in sales after growing 7.6 per cent on a like-for-like basis last year.