A Mid-Year M&A Check-In

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Welcome back to Full Coverage, friends. Thank you for joining me this week.

Well, I binged watched the last four episodes of “Euphoria”, and despite all the criticism and outlandish storylines I have to say I’m sad it’s over. I won’t spoil anything, but I guess I shouldn’t have been so naive to expect that a show fundamentally about addiction would have a happy ending.

As for the makeup, which I was critical of in the first few episodes, it did amp up, especially on Rosalìa’s Magick. But the fashion was far more exciting, especially on Alexa Demie’s Maddy. I found myself looking up her vintage Jean Paul Gaultier and Roberto Cavalli looks and cross-referencing The RealReal throughout each episode.

Anyway, back to beauty. I don’t know about you, but it’s been quite funny watching the “he said, he said” back-and-forth play out after the Estée Lauder Companies and Puig deal collapsed roughly two weeks ago. After Puig’s company meeting last Friday, a flurry of stories were published zeroing in on Puig’s other options (Kering, which I reported months ago) and its commitment to family leadership per executive chairman Marc Puig. Then on Tuesday, Lauder chief executive Stéphane de La Faverie said the deal fell through because of the purchase price. Well, yes. If Charlotte Tilbury was asking for $1 billion dollars per the structure of her earn out, that would affect the overall price of Puig.

Jokes aside, insiders confirmed to me that the floated purchase price of €18-19 ($21 to $22.20) per share for Puig’s Class B shares was accurate and Tilbury’s deal structure was indeed the straw that broke the camel’s back. I’m sure we will continue to hear other versions of this story until the industry is tired of it, or until another conglomerate (ahem, Unilever) makes a greater offer for either company. But for Puig, any real options for M&A are going to have to wait until 2031, when the company fully acquires Charlotte Tilbury.

Ok, on to my main topic: A mid-year check-in on M&A.

What Waldencast’s Obagi Sale Tells Us About M&A in 2026

On Monday, I broke the news that Waldencast sold skincare line Obagi to private equity firm Bridgepoint Group (who has been on a tear with clinical brands) and is holding on to Milk Makeup as its sole asset. The Obagi sale was expected — it’s one of the most desirable professional skincare labels on the market. The deal shouldn’t be viewed as an outlier, but rather a representation of what is happening in beauty right now.

The professional play: The skincare market has moved towards doctor-backed and clinical brands; sponsors and strategics are looking for brands that prove efficacy, whether that’s perennial favorites like ZO® Skin Health (also created by Obagi founder Dr. Zein Obagi) or Is Clinical as well as masstige labels like Prequel.

As Obagi’s Michel Brousset, who is departing Waldencast to help Bridgepoint build their professional skincare division, told me this week: “When you have something doctor recommended, why would you put watermelon on your face?”

In the details: 2026 has been a moderate year for M&A. Despite the collapse of Puig and Lauder, deals have gotten done: Advent’s purchase of Salt & Stone; Henkel’s aggressive moves for Olaplex and Not Your Mother’s; ELC’s acquisition of Forest Essentials and investment in 111Skin, among others. These deals have largely been safe bets, and reflect firms’ core competencies versus a desire to embrace something trendy or new.

On the clinical front, Roundtable Healthcare Partners bought mineral sunscreen brand Colorescience in February, and I know a handful of other labels that are seeking investment or are close to finding a buyer. I expect more deal flow to happen, especially minority and majority stakes, but let’s see which brands get the coveted conglomerate blessing. Those will be few and far between.

Obagi falls into the OG doctor skincare pack. It was founded in 1988 and is rooted in the professional channel (products are both prescription and non-prescription). Obagi has had a number of owners over the years, but its proposition still holds, even if the professional channel is highly complex and education for doctors and aestheticians is expensive. Clearly, its purchase price of $460 million illustrates its desirability — and you can’t forget the $82.5 million premium Waldencast received for selling Obagi’s licence in Japan.

SPAC mania no more: As a special purpose acquisition company, Waldencast was never well capitalised to act as a true conglomerate. Others that attempted to get off the ground never did, like Katherine Power’s Powered Brands. It’s yet another signal that the conditions of the post-pandemic, low-interest rate consumer world no longer exist. Waldencast’s debt structure limited its ability to buy more brands, and now it’s left with Milk Makeup, a once-valuable colour label that has seen its relevance fade because of both stock issues and its inability to see the same sales of its Jelly Tint blushes from 2024 (more on Milk later). Single beauty brand companies in the public markets have had a tough go of it lately (see: Olaplex). Even E.l.f. had to eventually build out its portfolio to compete.

The colour conundrum: I imagine Waldencast is looking to sell Milk, but other makeup labels like Kosas, Makeup by Mario, Merit, Westman Atelier and more are in a holding pattern. No one wants to take a bet on colour lines, which are capital intensive, trend-based and scary to investors and conglomerates alike. Still: Beauty is cyclical. I hope we eventually see more M&A action in makeup, but until then the right sponsor could roll up a few of these lines and go public (hello, TSG.) As for Milk, president and co-founder Mazdack Rassi was unavailable to comment.

The topical treatment blur: Now back to Obagi. The real value-add here would be if the brand can move into aesthetics. It purchased filler line Novaestiq last July, and with the capabilities of Bridgepoint’s other pharma line Laboratoires Vivacy, I see no reason for Obagi not to have a branded injectable of its own à la Abbvie’s Botox. It would be hard work to get the same name recognition, but beauty operators are far better at marketing and branding than their pharma counterparts.

What You Should Be Reading

With under three weeks to go, be sure to register for our Global Forum livestream. [The Business of Beauty]

What happens when the weight-loss drugs you resisted become the only medicine that works? [Vogue]

This is sad. “Friendless” influencers are taking off amidst the loneliness epidemic. [The Cut]

Has anyone been watching Off Campus? The Amazon show has sparked the new it-girl hair style. [TikTok]

Are teens willing to trade Sephora for Urban Outfitters? [The Business of Beauty]

A belated happy 100th birthday to Marilyn Monroe, the ultimate woman of mystery. [Airmail]

I live on the Upper East Side. I see these before and afters on the regular. [Daily Front Row]

Thanks y’all,

Priya