French cosmetics maker L'Oreal <OREP.PA> acquired U.S. make-up brand Urban Decay from private equity firm Castanea Partners as part of an effort to reach more upscale young consumers.
Continue Reading Below
L'Oreal did not say how much it paid for California-based Urban Decay, which was created in 1996 by make-up expert Wende Zomnir and had sales of $130 million in its fiscal year ended June 2012.
Liberum Capital analyst Pablo Zuanic welcomed the deal, which he pegged at about $250-300 million or slightly more than 2 times sales.
Urban Decay is "exactly the type of brand L'Oreal needs to beef up its make-up portfolio in the prestige channel," he said in a note.
The market for specialist make-up brands represents 44 percent of the luxury cosmetics market in the United States.