Beauty consolidation in 2021 has been fueled by interest in mission-based independent beauty companies, according to a report by Capstone Partners analyzing the Beauty & Wellness sector. The report, issued in October, states that private strategic buyers have led transaction activity accounting for 47 percent of total deals year to date, with private equity buyers accounting for 32 percent of transactions, and public companies accounting for 21 percent of deals. Mission-based indie brands are the main focus for buyers, made attractive by their millennial and Gen-Z consumer base. On the flip side, a growing number of indies are looking for larger partners due to challenges “in supply chain, employee retention, and e-commerce importance,” Capstone said. Skin care remains the most sought-after category in beauty, “largely due to its high price points and margins, its lack of fashion risk, and customer loyalty to brands,” said Capstone’s Head of Consumer Investment Banking, Ken Wasik. And perhaps most importantly, Capstone said Beauty & Wellness M&A volume outperformed the broader consumer industry in 2021. Here, CEW Beauty News recalls the most important deals in 2021.

L’Oréal to Acquire Youth to the People

This month, L’Oréal announced it signed an agreement to acquire Youth to the People, the California-based, vegan skin care brand founded in 2015 by cousins Greg Gonzalez and Joe Cloyes. Youth to the People utilizes superfood ingredients and innovative active ingredients. It is available in the US, Canada, Australia, and select European markets via direct-to-consumer and selective distribution. Youth to the People is expected to record over $50 million of sales in 2021. Investors in the brand included Sandbridge Capital, Strand Equity and Carisa Janes, the founder of Hourglass Cosmetics.

Procter & Gamble to Acquire OUAI

Also in December, Procter & Gamble announced it will acquire prestige hair care and lifestyle brand OUAI. The purchase price was not disclosed. Founder Jen Atkins will remain as Chief Creative Officer. Since OUAI was launched in 2016, it has expanded beyond hair care into candles, body care, fragrance, and lifestyle products. It is run by Colin Walsh, who joined the firm in 2018 from DevaCurl and prior to that L’Oréal. Colin will stay on as the company’s CEO.

Procter & Gamble to Acquire Farmacy Beauty

In November, Procter & Gamble announced its intent to acquire indie ‘farm-to-face’ skin care brand Farmacy Beauty. Launched in 2015 by entrepreneur David Chung along with Mark Veeder, Farmacy Beauty offers science-based, sustainable skin care rooted in responsible beauty. It sells direct-to-consumer on its website and has exclusive distribution in Sephora North America. David also founded Englewood Lab, a cosmetic beauty supplier. In 2018 David sold a majority interest in Englewood Lab to a Korean manufacturer, Cosmecca Korea, for $57 million.  David used funds from that deal to fuel Farmacy’s growth.

Waldencast Acquisition Corp. to Buy Milk Makeup and Obagi

In November, Waldencast Acquisition Corp., a special purpose acquisition company related to private equity firm Waldencast, agreed to buy Milk Makeup and Obagi, in a deal with a combined value of $1.2 billion. It is the first step in Waldencast Acquisition Corp.’s strategy to create a global multi-brand beauty and wellness platform. The transaction includes investors in Milk and Obagi, and the business will be run by founder Michel Brousset as Chief Executive Officer, and Hind Sebti as Chief Operating Officer. Waldencast also acquired a stake in Kjaer Weis earlier this year.

L’Occitane Acquires Sol de Janeiro

In November, L’Occitane bought a majority stake in Brazilian premium beauty brand Sol de Janeiro based on a valuation of $450 million. Heela Yang, Chief Executive Officer and Co-Founder of Sol de Janeiro, remains CEO. Founded in 2015, Sol de Janeiro features sustainably sourced ingredients from Brazil. It is one of the fastest-growing premium skin care brands in North America, with success across body care, fragrance and hair care products, selling directly to consumers through its website and various premium retailers across the globe.

Live Tinted Raised More Than $3 Million in Seed Funding

Live Tinted closed its seed round of funding in October, raising more than $3 million led by Montage Ventures. Other investors included Halogen Ventures, Curate Capital, and Fearless Fund. To date, the brand has raised $4.95 million. The latest cash injection will be used for product development and to expand. Live Tinted, founded by social media Influencer Deepica Mutyala, a Texas native of South Asian descent, was originally founded as a digital community focused on inclusive, diverse beauty.

Beauty Pie Raises $100 Million

In September, Beauty Pie announced that it had completed a Series B financing round of $100 million led by Index Ventures together with U.S.-based Insight Partners, Balderton Capital, General Catalyst, and Latitude VC. This latest round brings Beauty Pie’s total funding to date to approximately $170 million. Beauty Pie is planning increases in its warehouses and pop-up shops, and looks to introduce a new membership model. The direct-to-consumer, membership-driven company experienced exponential growth during the height of the pandemic, and doubled its members in fiscal year 2021.

Paula’s Choice Acquired by Unilever

In June, Unilever announced that it had signed an agreement to acquire Paula’s Choice from TA Associates. While terms of the deal were not disclosed, industry sources reported that the deal was worth $2 billion. Paula’s Choice was an early adopter of direct-to-consumer sales and ingredient transparency in beauty. Founded by Paula Begoun in 1995, the brand is famous for demystifying the science behind skin care, including an extensive Ingredient Dictionary that breaks down the research behind nearly 4,000 ingredients, and Expert Advice, a curated online hub of skin care and ingredient knowledge.

Beautycounter Valued at $1 Billion After Carlyle Group Buys Majority Stake

In April, private equity firm The Carlyle Group acquired a majority stake in Beautycounter, valuing the clean beauty brand’s parent company, Counter Brands LLC, at $1 billion. Since launching in 2013, Beautycounter has become a leader in clean beauty. It has paved way for ingredient innovation and transparency, and has introduced The Never List to ensure 1,800 potentially harmful ingredients are never used in its product formulations. Beautycounter plans to amplify its brand mission and ramp up its omnichannel strategy.

Mielle Organics Received a Major Investment From Berkshire Partners

In April, Mielle Organics announced that Boston-based Berkshire Partners made a significant investment in the Black-owned, natural hair care company. The financing will support Mielle Organics’ growth plans, with a portion used to support community development including its More Than a Strand program to strengthen the bond between mothers, daughters, and young girls across the United States, Caribbean, and Africa. Mielle’s cofounders will continue to be majority owners.

Madison Reed Raised $52 Million

Madison Reed closed a $52 million financing round in February to continue to fuel its omnichannel, and build upon the 130 percent growth it saw during 2020 (during which it nearly doubled its customer base). The round was led by True Ventures, an investor in Peloton, Ring, and Blue Bottle Coffee. The round included participation from Norwest Venture Partners, Comcast Ventures, and Shea Ventures, all of whom had invested in earlier rounds. New investors include Goldman Sachs and Motley Fool Ventures. Madison Reed looks to introduce additional hair coloring services, Color Bars, and products.

Helen of Troy Acquires Drybar Products; WellBiz Acquires Franchise Rights

Helen of Troy completed the acquisition of Drybar Products LLC for $255 million in late January. As part of the transaction, Helen of Troy granted a worldwide license to Drybar Holdings LLC to use the Drybar trademark in their continued operation of Drybar salons. In February, franchise portfolio company WellBiz Brands acquired franchise rights for Drybar salons. There are 141 salons in the US. As part of the deal, it was reported that Drybar Holdings LLC would continue to operate 87 Drybar shops as Drybar’s largest franchisee.

Coty Acquires Minority Stake in KKW Beauty

In January, Coty announced that it had closed on a 20 percent investment in Kim Kardashian’s KKW Beauty for $200 million. As part of the deal, Coty and Kim said it would be entering new beauty categories, including hair care, skin care, personal care and nail products. In July, Kim said that she would be shutting down as part of rebranding efforts to make it “a more modern, elevated, sustainable brand and customer experience.”

Thirteen Lune Raises $3 Million

In January, inclusive beauty e-commerce platform Thirteen Lune raised $1 million as part of a seed round, with early investors including Gwyneth Paltrow, Sean ‘Diddy’ Combs, Naomi Watts, and Gregg Renfrew of Beautycounter. Thirteen Lune’s mission is to “inspire the discovery of beauty brands created by Black and Brown founders that resonate with people of all colors.” In November, Thirteen Lune closed a $3 million investment round led by Fearless Fund, a venture capital fund built by women of color for women of color. The e-tailer will be developing a private label beauty line, reinforce its supply chain, and build a larger executive team.