Top Beauty M&A Targets for 2025

Investors and founders are eagerly anticipating that 2025 might be the year where the beauty industry experiences a surge in acquisitions after a relatively quiet period last year. Despite brands like Kosas and Rare Beauty exploring potential sales, major conglomerates mostly remained on the sidelines in 2024, with only a few notable acquisitions taking place.

Last year, private equity firm TSG Consumer Partners took a majority stake in Summer Fridays, L Catterton acquired Kiko Milano, Manzanita Capital purchased D.S & Durga, and Helen of Troy bought Olive + June. Following these transactions, many brands hit pause on their sale processes, hoping for a more favorable market environment. The big question now is whether the time for increased deal-making has arrived.

However, potential deals are faced with challenges. Many brands are looking for exits, particularly those with annual net sales ranging from $70 million to $120 million, creating a crowded marketplace. In the cosmetics sector, buyers are wary of sky-high valuations, as seen with brands like Pat McGrath Labs, Morphe, and Anastasia Beverly Hills.

Founders are seeking top-dollar valuations, while buyers are cautious of market peaks. Strategic buyers are looking for brands with clear growth potential, which can be challenging for established brands with a strong customer base and existing retail partnerships, such as at Sephora.

Despite the challenges, there is optimism in the market. Strategic buyers may become more active in 2025, especially with Estée Lauder Companies and Unilever’s prestige beauty division under new leadership. Alternative buyers like private equity firms and non-US conglomerates are also expected to show interest. These buyers are increasingly looking for brands with opportunities for expansion and growth post-acquisition.

Here are some brands to keep an eye on in 2025:

Medik8: The British skincare brand known for its premium products, distributed primarily through professional channels and specialist retailers. Sales reached approximately $70-80 million in 2024, with a recent growth investment from private equity firm Inflexion.

Kayali: A premium fragrance brand under Huda Beauty, with net sales around $100-120 million in 2024. Rumors suggest the brand may be exploring a sale to focus resources on Huda Beauty’s core line.

Gisou: Founded by influencer Negin Mirsalehi, this hair care line has expanded into cosmetics and body care, reaching around $200 million in turnover in 2024.

Merit: A growing cosmetics brand targeting women over 40, with notable partnerships and a revenue split between wholesale and direct-to-consumer.

IGK and One/Size: Hair care and cosmetics lines owned by Luxury Brand Partners, exploring potential sales in 2025.

Makeup by Mario: The prestige cosmetics brand exploring exit options with retail sales reaching $300 million in 2024.

Westman Atelier: A luxury cosmetics brand that saw significant success in 2024, attracting attention in the marketplace.

As the beauty industry looks ahead to a potentially active year for acquisitions, these brands are positioned for potential deals and growth opportunities in 2025.