Mid-Sized, Strategic Transactions Drive Beauty Market M&A in First Half of 2025
Capstone Partners latest Beauty Market Report finds that merger and acquisition (M&A) activity in the sector has held steady year-over-year (YOY) despite a turbulent start to 2025 characterized by economic volatility. General market uncertainty and recessionary concerns have stalled large-scale, headline deals in the Beauty market to date. However, middle market operators have continued to transact, propped up by corporate divestitures, product expansions, and manufacturing consolidation. Beauty market participants are expected to continue to sell non-core operations and outsource product manufacturing as supply chains realign under the new U.S. administration. This has underpinned expectations for a vibrant M&A market for contract manufacturers.
Consumer health and the new administration have continued to headline the Consumer industry narrative in 2025, particularly as tariff policy developments have clouded the operating environment outlook. Consumer confidence fell 31.7% between the end of 2024 and April 2025—recording the lowest index reading since the height of the COVID-19 pandemic in April 2020—according to The Confidence Board. The low index reading in April 2025 coincided with sweeping tariff announcements from the administration that impacted nearly all U.S. trade partners. However, subsequent tariff delays, rollbacks, and legal pushback have alleviated the initial market shock, and consumer confidence rebounded 14.4% in May.
Also included in this report:
An analysis of key sector trends, what categories are still seeing elevated demand, and why contract manufacturing operations have garnered heightened acquirer interest in the current environment.
A breakdown on what type of buyers have been targeting Beauty market participants and sector M&A pricing compared to the broader Consumer industry.
Capstone Partners’ Consumer Investment Banking Team provides M&A, capital formation, and financial advisory services to the owners of middle market businesses in the consumer and retail industries. Our team partners with leading mid-to-large sized consumer businesses that serve growing end-markets. For more information on the trends featured in our Beauty Market Report or to speak with one of our Consumer Investment Banking Team members about how to grow, value, and/or sell your company, we are here to help. Contact us today to start a conversation.
