Industry Report: Beauty and Personal Care Q4 2025 [FOCUS]

Key Report Highlights

• M&A Activity Slows in 2025 but Remains Strategic and Selective
  The U.S. beauty and personal care M&A market recorded 67 transactions in 2025, down from 108 in 2024. This decline reflects caution from buyers amid macro headwinds like interest rate pressure and tariff volatility. Despite the pullback, strategic buyers accounted for nearly 80% of deal activity, with strong emphasis on portfolio optimization and high-growth categories
• Skincare, Supplement, and Men’s Grooming Brands in Demand
  M&A volume in 2025 was fueled by acquirer interest in clinical skincare, health-aligned personal care, and men’s grooming. Buyers targeted brands with innovation and consumer trust, such as Bansk Group’s acquisition of Byoma. The men’s grooming segment is expanding rapidly, with Unilever’s $1.5B acquisition of Dr. Squatch highlighting category momentum.
• Buyers Reward Financial Discipline and Brand Differentiation
  Recent deals show buyers are willing to pay premium multiples—up to 16x EV/EBITDA—for assets with recurring revenue, high margins, and proven scalability. Transaction examples include:
  • Kimberly-Clark’s $48.7B acquisition of Kenvue
  • L’Oréal’s $1.07B acquisition of Medik8
  • E.L.F. Beauty’s $1B purchase of Rhode (at 14.0x EBITDA)
• Key Value Drivers: Innovation, Repeat Purchase, and Operational Readiness
  Buyers are prioritizing brands that demonstrate:
  • Product defensibility (e.g., clinical backing, proprietary IP)
  • High customer loyalty and data visibility
  • Diversified distribution across DTC, retail, and international channels
  • Professionalized infrastructure
  • Founders with succession plans and an expansion runway also attract valuation premiums
• Growth Expected in Fragrance, Hair Health, and Scalp Care in 2026
  Looking ahead, categories such as fragrance (viewed as an affordable luxury) and hair/scalp health are gaining traction. Rising interest in alternative hair solutions (e.g., wigs, extensions) and dermatology-backed products is expected to drive new deals. Additionally, wellness crossover—particularly in supplements supporting skin health—continues to shape buyer strategy going into 2026.

FOCUS Investment Banking is a national middle market investment bank providing M&A advisory, capital raising, and corporate finance services to privately held companies. Founded over 40 years ago, the firm specializes in advising lower middle market businesses—typically with $5 million to $300 million in revenue—across a broad range of industries, including aerospace & defense, healthcare, technology, manufacturing, business services, and automotive.

With a team of seasoned professionals who bring deep operating and transactional experience, FOCUS delivers partner-led, tailored guidance on sell-side and buy-side M&A, growth capital, exit planning, and valuation services. The firm combines industry expertise with global reach through its affiliation with M&A Worldwide, offering access to international buyers and investors.

Headquartered in Washington, D.C., FOCUS also maintains offices in Atlanta, Chicago, Los Angeles, Miami, and Dallas. Securities transactions are conducted through FOCUS Securities LLC, member FINRA and SIPC.

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