June 2013
Beauty Care M&A Report – Welcome!
Welcome to the inaugural edition of the Intrepid Investment Bankers LLC Beauty Care
M&A Report. This newsletter is designed to provide updated information on select M&A
transactions, public company valuations, and other trends impacting middle market
companies in the beauty care industry. We hope it will serve as a useful tool for your
business and any future deal‐making activity. Please enjoy and feel free to pass it along to
others in the beauty care industry.
Recently Announced and Completed Beauty Care M&A Transactions
Coty Inc. announces an agreement to acquire StarAsia from Isibane Pte. Ltd. – StarAsia is
a beauty products distributor in Southeast Asia. According to Coty management, StarAsia
will provide an established distribution platform to sell mass brands in key developing
markets in the region. The transaction is expected to close in July.
Valeant Pharmaceuticals International acquires Obagi Medical Products –
Headquartered in Long Beach, California, Obagi Medical Products, Inc. develops, markets,
and sells proprietary skin care systems in the physician‐dispensed skin care market.
Valeant will acquire all of the outstanding common stock of Obagi for $24.00 per share in
cash or an enterprise value of approximately $380 million. Obagi had total revenue of
approximately $120 million and EBITDA of $29 million in 2012, representing an
acquisition multiple of 3.2x revenue and 13.2x EBITDA. According to Valeant, the
combination is expected to yield annual cost synergies of $40 million within six months of
closing.
L'Oréal acquires Health and Beauty Care Business of Interconsumer Products (ICP)
Limited – Based in Kenya, ICP is a leading hair and skin care provider in the Kenyan beauty
care market with brands including Nice & Lovely, Gold Touch, Bouncy, All‐Tyme, Golden
Shine, Queen Elizabeth, Clarion, Versman, VersEva, and Smooth & Lovely. The acquisition
provides L'Oréal leading beauty care brands in the local market and expands its
operations in east Africa. ICP generated revenue of €15 million in 2012. No purchase price
was disclosed.
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Cont’d
Announced Beauty Care Transactions by Year
Announced Beauty Care Transactions by Quarter
140
30
26
70
84
56
94
94
96
92
76
50
35
# of Transactions
99
105
0
24
24
22
20
18
12
12
6
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 LTM
May
31
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Beauty Care Public Company Comparables Data
Share Price
($ in millions, except per share data)
Avon Products Inc.
Beiersdorf AG
Elizabeth Arden, Inc.
The Estée Lauder Companies Inc.
Inter Parfums Inc.
L'Oreal SA
Revlon, Inc.
Shiseido Company, Limited
% of 52
Market
Enterprise Cap.
Value
Revenue
Gross Profit
EBITDA
$10,208
$20,682
$1,377
$26,290
$921
$101,890
$1,042
$5,802
$12,350
$18,111
$1,704
$26,290
$761
$99,836
$2,202
$6,858
$10,625
$7,960
$1,342
$10,026
$703
$29,388
$1,427
$6,832
$6,526
$5,034
$674
$8,036
$372
$20,769
$921
$5,150
$992
$1,226
$158
$1,831
$132
$5,924
$244
$641
(as of 05/31/13) Week High
$23.57
$91.18
$47.10
$67.78
$29.98
$170.54
$19.90
$14.58
96.1%
95.1%
94.7%
93.2%
94.0%
94.6%
84.4%
89.9%
Enterprise Value / LTM
PE
Last Twelve Months
Revenue Growth
LTM Margins
Revenue
EBITDA
Ratio
1‐year
3‐year
Gross
EBITDA
Avon Products Inc.
Beiersdorf AG
Elizabeth Arden, Inc.
The Estée Lauder Companies Inc.
Inter Parfums Inc.
L'Oreal SA
Revlon, Inc.
Shiseido Company, Limited
1.2x
2.3x
1.3x
2.6x
1.1x
3.4x
1.5x
1.0x
12.5x
14.8x
10.8x
14.4x
5.8x
16.9x
9.0x
10.7x
NM
32.4x
28.4x
26.8x
6.4x
26.5x
29.3x
NM
(5.5%)
5.6%
9.5%
5.3%
8.5%
10.4%
3.5%
(0.7%)
0.5%
2.2%
7.3%
9.5%
17.0%
8.7%
3.2%
1.7%
61.4%
63.2%
50.2%
80.2%
53.0%
70.7%
64.5%
75.4%
9.3%
15.4%
11.8%
18.3%
18.8%
20.2%
17.1%
9.4%
Mean
Adjusted Mean *
1.8x
1.7x
11.8x
12.0x
25.0x
27.8x
4.6%
5.3%
6.3%
5.4%
64.8%
64.7%
15.0%
15.1%
Total Enterprise Value / EBITDA Multiples
Total Enterprise Value / Revenue Multiples
18.0x
12.0x
9.0x
6.0x
2.5x
Average:10.9x
Average:1.5x
2.0x
TEV / EBITDA
15.0x
TEV / EBITDA
# of Transactions
113
1.5x
1.0x
3.0x
0.5x
0.0x
0.0x
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Public Company Historical Stock Performance
250%
200%
150%
100%
50%
0%
-50%
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Beauty Care Index
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
S&P 500 Index
About Intrepid Investment Bankers LLC
Intrepid Investment Bankers LLC, headquartered in Los Angeles, Calif., is a corporate
finance advisory firm focused on the middle market. Intrepid's services include M&A
advisory, equity and debt capital raising and providing strategic advice in complex
securities transactions. The firm's clients are entrepreneur and family‐owned businesses,
financial sponsors and major corporations. Collectively, the senior banker team at Intrepid
brings over 150 years of mergers and acquisitions advisory experience and has advised on
over 350 transactions spanning a broad range of industries including Consumer Products,
Business Services, Financial Institutions, Food & Beverage, Healthcare, and Industrial
Products & Distribution. Intrepid Investment Bankers LLC augments its international
capabilities by partnering with M&A International Inc., an exclusive global alliance of
independent middle market mergers and acquisitions advisory firms.
www.intrepidib.com Member FINRA/SIPC.
* Adjusted mean excludes highest and lowest values.
Source for all data: Capital IQ
Intrepid Investment Bankers LLC
11755 Wilshire Boulevard
Suite 2200
Los Angeles, California 90025
Phone: (310) 478‐9000
www.intrepidib.com
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