According to WWD, the likely sale of Procter & Gamble’s CoverGirl and Max Factor cosmetics brands was the topic of conversation this week at the National Association of Chain Drug Stores meeting. The sale, being handled by Goldman Sachs Group Inc., is said to be worth a total of $3 billion, but P&G is unsure whether it will sell its brands as a package deal. Names of power players in the industry like Revlon, Unilever and Coty were thrown around as potential buyers and it’s also speculated that Korean beauty brands might want a piece of the American cosmetics pie.
A WWD source says that $2.2 billion is a reasonable asking price for a brand that is “fully mature and doing over $300 million EBITDA.” While CoverGirl has a dominant U.S. presence, its worldwide existence is lacking and Max Factor isn’t sold stateside any longer. In addition, Euromonitor reported that CoverGirl’s market share in the states has fallen to 8.7 percent from 10.8 in the past five years. With P&G CEO A.G. Lafley looking to cut costs by selling the company’s beauty brands, chances are the brands will find a new home soon.