Beauty’s Top M&A Targets for 2025

Investors and founders are hoping that 2025 is the year that the beauty deal pipeline starts to unclog.

Last year, an expected wave of acquisitions failed to materialise, even as attractive brands like Kosas and Rare Beauty explored sales. Beauty’s biggest conglomerates mostly stayed on the sidelines, aside from Puig’s acquisition of Dr. Barbara Sturm in January. Other buyers did step in: private equity firm TSG Consumer Partners’ took a majority stake in skincare label Summer Fridays, L Catterton bought the mass cosmetics line Kiko Milano, family office investors Manzanita Capital acquired cult perfumer D.S & Durga and Helen of Troy bought nail care line Olive + June.

Many brands ended up pausing their sale processes while they waited for a better M&A environment. The question now is whether that moment has finally come.

Weighing against deal making is the sheer number of brands looking for an exit, many with annual net sales in the sweet spot between $70 million and $120 million. That’s especially true in cosmetics, where buyers are cautious after brands like Pat McGrath Labs, Morphe and Anastasia Beverly Hills have struggled to justify multi-billion dollar valuations.

In short, founders are in a standoff with buyers; they are still hoping to secure heady valuations at revenue multiples in the high teens, while acquirers worry about buying at the peak of the market. Strategic buyers are looking for brands with a clear path to further growth – not always easy to find for a line that’s already gained a sizeable customer base and has shelf space at Sephora.

There are some deal pathways still open, however. Strategics may be back in the market this year, especially now that Estée Lauder Companies has a new chief executive, and Unilever’s prestige beauty division a new head, removing uncertainty at the top of two potential acquirers. More alternative buyers like private equity firms, distributors and non-US-based conglomerates are also likely to make bids.

Buyers are also getting smarter about spotting brands with room to grow: brands that are big performers in wholesale could make a post-acquisition play for direct-to-consumer or professional business. A buyer could broaden a brand’s assortment beyond its hero product, or expand into new markets.

Here are the brands to watch in 2025.

Medik8. The British premium skincare brand is known for its clinical claims and premium products like the popular Crystal Retinal range and serums like Liquid Peptides, which the company makes entirely in-house with its own production facility and research lab in Buckinghamshire. Its distribution network is primarily based on professional channels and specialist skincare retailers in countries ranging from Australia, Mexico and Ukraine, though it’s also available in select Space NK stores, a premium beauty retailer in the UK. The US is a focus area, currently making up around 15 percent of sales. In 2021, the previously bootstrapped brand took a growth investment from private equity firm Inflexion. Sales reached around $70-80 million in 2024, without being exposed to the likes of Sephora or Ulta Beauty — expect news about this brand finding a new owner before long.

Kayali. The premium fragrance line is founded by Mona Kattan, and is a sub-brand of the cosmetics company Huda Beauty, co-founded by her sister, Huda Kattan. The line’s distinctive bottles and crowd-pleasing scents like Vanilla 28, Eden Juicy Apple and Yum Pistachio Gelato have grown in popularity, with net sales reaching around $100 million to $120 million in 2024. Rumours swirled since September that the brand is exploring a sale; a successful exit would free up cash and resources to refocus on the core Huda Beauty line, which has been valued at $1 billion.

Gisou. Founded in 2015 by influencer Negin Mirsalehi, the premium hair care line is known for its use of honey as a key ingredient. (Mirsalehi’s family are sixth-generation beekeepers). Aside from its hero Honey Infused Hair Oil and styling products, the brand has branched out into cosmetics, body care and home fragrance with a range of hair perfumes, lip oils and candles. Sold in specialty stores like Sephora and Mecca Beauty, buzzy pop-up events like a Christmas event at London’s Harrods helped the brand reach around $200 million in turnover in 2024.

Merit. With its minimalist makeup look and sophisticated, retro-infused branding, cosmetics maker Merit has been steadily growing its customer base. One of the few cosmetics brands that consistently markets to women over the age of 40 — Merit has enlisted stars like Martha Stewart (age 83) and model Kirsty Hume (48) to make social content for the brand it’s gained many fans in the older Millennial and Gen-X cohorts. The brand made several big moves in 2024: It hired former MAC Cosmetics global president Philippe Pinatel as chief executive officer in February; launched its first fragrance, Retrospect, in November, and crossed $100 million in net revenue, with a roughly even split between wholesale and direct-to-consumer. With a slightly lower price point than other clean or luxury beauty labels — its individual products cost between $20 to $40 — Katherine Power, the brand’s founder, previously told The Business of Beauty that its pricing strategy generates bigger basket sizes. Customers can pick up products like its Flush Balm and Bronze Balm in bundles costing $129 for five items, with no one product making up more than 20 percent of its revenue; the brand’s average order value on its DTC site is over $100.

IGK and One/Size. The premium hair care and cosmetics lines are both owned by brand incubator Luxury Brand Partners, which began exploring a sale in July. Co-founded with the influencer and makeup artist Patrick Starrr, revenues at One/Size reached around $135 million in 2024, with a 40 percent EBITDA margin, while IGK, which is known for its salon-quality styling products, generated around $72 million in revenue. Success at Sephora for One/Size with its best-selling setting spray, On ‘Til Dawn, have buoyed the brand, though some buyers remain cautious about labels with influencer founders.

Makeup by Mario. The prestige cosmetics maker tapped J.P Morgan to explore exit options in June, with retail sales hitting $300 million in 2024, up from $225 million the previous year. A previous funding round valued the brand, which was founded by celebrity makeup artist Mario Dedivanovic, at $200 million. There’s been difficulty managing its popularity, with customers complaining of empty stands in Sephora stores, though the company has stabilised its inventory and created buzz around new product launches like its SurrealSkin complexion franchise and trendy eyeshadow palettes.

Westman Atelier. The luxury cosmetics brand has been one of 2024’s biggest winners, with successful launches into new markets including Australia, expansion in existing retailers throughout the US and UK and a raft of celebrity and influencer endorsements. Founded in 2018 by makeup artist Gucci Westman, the brand’s blend of cosmetics with skincare ingredients, mastery of a natural, fresh-faced look and elegant packaging saw it reach around $75 million in revenue in the last year. The brand might not explore a process more fully until the latter portion of the year or even 2026, but interest is high.

Vacation. While deal activity isn’t expected until much later in 2025, and more likely, 2026, sun care brand Vacation was on track to achieve around $40 million in retail sales last year, putting it in the crosshairs of potential acquirers. Launched in 2021, the brand has had no shortage of viral moments or industry plaudits, as its retro-inspired products like Classic Whip and Orange Gelée have resonated with shoppers. Placement at the tastemaking LA grocery store Erewhon helped boost its cool factor, but expansion on Amazon and in Ulta Beauty have buoyed its mass appeal.

Sign up to The Business of Beauty newsletter, your must-read source for the day’s most important beauty and wellness news and analysis.