Estee Lauder Cos. has agreed to buy cosmetics company Too Faced, a makeup brand popular with millennials, for about $1.45 billion. This marks the biggest acquisition in the history of Estee Lauder.
Too Faced, which is expected to top $270 million in net sales this year, will help Estee Lauder expand in e-commerce and specialty stores, according to a statement Monday. The purchase is expected to be completed next month.
The deal, which would dwarf Estee Lauder’s previous acquisitions, extends a run of industry mergers this year. Coty Inc. acquired more than 40 of Procter & Gamble Co.’s beauty brands last month in a transaction worth $12.5 billion. And Revlon Inc. agreed to acquire Elizabeth Arden Inc. in June for about $419 million.
Estee Lauder could use a boost after delivering a disappointing forecast to investors this month. Estee Lauder suffered its worst stock rout in more than a year on Nov. 2 after saying that earnings would be $1.10 to $1.15 a share this quarter. Analysts had estimated $1.31 on average. Its shares are down 12 percent this year.
“We see terrific opportunity for additional value creation through expansion in new and existing markets both in the U.S. and internationally, as well as in travel retail globally,” Freda said in Monday’s statement.
Too Faced currently gets about 83 percent of its sales from North America, meaning there’s room for growth overseas.
Too Faced company
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