LVMH-backed company buys Italian KIKO for $1.5 billion in makeup sector – 04/26/2024 at 1:53 p.m.

((Automated translation by Reuters, please see disclaimer

(Added details across the company) by Valentina Za

LVMH-backed buyout firm L Catterton has agreed to buy a majority stake in KIKO Milano in a deal that, according to a source familiar with the matter, values ​​the family-owned Italian low-cost makeup group at around $1.4 billion. euros ($1.5 billion), including debt.

L Catterton, specializing in consumer goods, is buying the stake of the Italian Percassi family, which founded in 1997 what is now one of the largest private makeup brands in the world, the two companies said in a joint press release.

The Percassis will retain a “significant” stake in KIKO, they added, without giving further details.

According to Fortune Business Insight, the global beauty products market is expected to reach $128 billion by 2032, up from $78 billion last year.

L’Oréal OREP.PA , meanwhile, predicts that the market will have around 600 million middle- and upper-middle-class consumers globally by 2030, with growing demand in countries such as China, Indonesia and Egypt, while remaining strong among baby boomers in mature markets such as Europe or North America.

L Catterton has already invested in more than 30 beauty brands, including Intercos, an Italian makeup manufacturer supplying top luxury brands, British skincare manufacturer Elemis, Japanese skincare brand ETVOS hairdressers Maria Nila and consumer technology company Oddity.

KIKO, whose turnover increased by 20% last year to around 800 million euros, operates more than 1,100 stores in 66 countries.

Its products, known for combining quality and affordable prices, are presented in an attractive manner in order to attract customers, especially younger ones.

“The quality of the innovative products, their accessibility, the personalized advice and the captivating design of the packaging are the distinctive elements of the brand,” said Simone Dominici, Managing Director of KIKO.

KIKO also sells online and some of its products are bestsellers across all age groups.

Dominici said KIKO would expand in the United States with the support of L Catterton and his senior adviser John Demsey – a former Estee Lauder EL.N executive who developed the MAC Cosmetics brand before resigning following the a scandal linked to an Instagram post.

The Percassis, originally from the northern Italian city of Bergamo and owners of Serie A soccer team Atalanta, also founded hair salon Bullfrog and men’s cosmetics brand Womo.

Active in commercial real estate, the Percassi Group manages commercial operations in Italy for companies including Starbucks SBUX.O , Nike NKE.N , Gucci and Victoria’s Secret. With offices around the world, the company employs 9,000 people.

BNP Paribas, BofA Securities, Intesa Sanpaolo IMI CIB, law firm Gatti Pavesi Bianchi Ludovici and Deloitte advised the Percassi family. L Catterton worked with Bonelli Erede as legal advisor and PWC.

($1 = 0.9304 euros)

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