L'Oréal SA, the world's largest cosmetic maker, said Monday that it has agreed to buy makeup brand Urban Decay from private equity firm Castanea Partners.
Terms of the deal were not disclosed, but the Wall Street Journal reported that France-based L'Oréal is paying between $300 million and $400 million for Urban Decay, citing a person familiar with the matter.
Based in Newport Beach California, Urban Decay offers star products in the eye category such as the Naked Palette and recently launched its new foundation, the Naked Skin weightless liquid make-up. Urban Decay is popular among the youthful highly-involved cutting-edge consumers who are attracted by the fashion-forward image of the brand. Urban Decay had net sales of $130 million for the fiscal year ended in June 2012.
"Urban Decay will beautifully complement L'Oréal Luxe's portfolio of iconic brands. It is the make-up specialist we needed to fully satisfy young women in search of playful colors and inspiration in selective distribution, at an accessible price point. It is totally additional to our existing propositions and as such it will contribute significantly to the growth of the Division in the years to come," said Nicolas Hieronimus, President L'Oréal Luxe.
Tim Warner, General Manager of Urban Decay, said, "L'Oréal's strong innovation capabilities and presence in every channel of distribution will enable Urban Decay to reach its full potential in the marketplace."
The deal is expected to close by the end of the year.
Urban Decay was bought by French luxury goods maker LVMH Moet-Hennessy Louis Vuitton in 2000, before being sold again in 2002 to the Falic Group. It was acquired by Castanea Partner in 2009.
L'Oréal shares closed Monday down 0.24% at €104.15 in Paris.
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