In a move to attract new and younger customers, cosmetics behemoth Estee Lauder Cos. said Monday that it had agreed to acquire Los Angeles makeup brand Smashbox Beauty Cosmetics Inc.
Analysts said privately held Smashbox would help give Estee Lauder — whose brands include Clinique, Aveda and MAC — a more youthful appearance. The New York cosmetics company would also gain an expanded presence at specialty retail channels such as Sephora, Ulta and QVC, where much of Smashbox's merchandise is sold.
"It's a good acquisition — it makes strategic sense," said Linda Bolton Weiser, an analyst at Caris & Co. No purchase price was given for the deal, which is expected to close in July.
Estee Lauder executives said they were encouraged by Smashbox's growing momentum, its reputation as a Hollywood-oriented brand and its expertise in digital and social media.
"We are excited to be acquiring a uniquely positioned cosmetics brand with true talent well known for engaging consumers," John Demsey, a group president at Estee Lauder, said in a statement. "Smashbox fits perfectly within our DNA."
On Monday, shares of Estee Lauder rose 73 cents, or 1.2%, to $61.77.
Smashbox was founded in 1996 by brothers Dean and Davis Factor, great-grandsons of legendary makeup artist Max Factor. The company will continue operating out of its L.A. headquarters.
"The Estee Lauder Cos. is the ideal home for Smashbox," Chief Executive Dean Factor said in a statement. "The company possesses the scale and vision to help transition Smashbox into its next phase of growth."