Colgate enters growing skincare space with two acquisitions

Norwest Venture Partners' sale of PCA Skin to Colgate-Palmolive Co. (NYSE: CL) had good timing because of growing interest in skincare products. A combination of aging baby boomers and a more a conscious younger generation is helping drive up demand for skin treatments, says Norwest general partner Sonya Brown. Brown is one of Mergers & Acquisition's Most Influential Women in Mid-Market M&A for 2018.

"We've seen increased interest in skin services," Brown tells Mergers & Acquisitions. One of the main reasons consumers are more conscious about their skin is because of the high amount of photos they take and share them on social media, says Brown. "I think there's definitely interest from folks taking photos and posting them on social media."

Colgate fist approached PCA about a possible deal nine months ago, according to Brown. A handful of potential buyers expressed interest in the target, but Norwest did not a run a sales process.

For New York-based Colgate, the deal gives the company gives an entry into the growing skincare space while expanding its personal care portfolio. At the same time, the company also acquired EltaMD, another skincare products provider. Colagte is best known for its branded toothpaste and other dental care products. "They've been studying it for years," Brown adds.

In other skincare treatment deals, Tengram Capital Partners reached a deal to buy skincare company RéVive. In 2016, Estée Lauder Cos. (NYSE: EL) bought skincare products company Becca Cosmetics and L'Oreal acquired IT Comestics.

Financo and Houlihan Lokey Inc. (NYSE: HLI) advised PCA. Wachtell Lipton Rosen & Katz and Wells Fargo Securities LLC (NYSE: WFC) advised Colgate on both deals. The deal closed on Jan. 4. Financial terms were not disclosed.