November 26, 2012 / 12:12 PM / 8 years ago

L'Oreal buys Urban Decay to beef up young, prestige offering

Outside view of L’Oreal cosmetic company headquarters in Clichy, northern Paris, February 18, 2008. REUTERS/Charles Platiau

PARIS (Reuters) - 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.

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.

Reporting by Dominique Vidalon; Editing by Helen Massy-Beresford

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