Intercos Eyes US Acquisition to Boost Skin and Hair Care Business
Intercos SpA, a prominent cosmetics manufacturer and key supplier to global brands like Estée Lauder Cos. and Dolce & Gabbana, is actively pursuing at least one acquisition in the United States. The strategic move aims to significantly expand its skin and hair care business within the world’s largest beauty market. Renato Semerari, Intercos’s chief executive officer, revealed in a recent interview that the Italian company is targeting firms with revenues in the range of $100 million to $200 million. He confirmed that one potential buyout candidate has been identified, with others still under consideration, though specific details remain undisclosed.
Semerari emphasized the company’s proactive approach, stating, “We are proactively trying to buy a company in the skin and hair care sector in the US.” He highlighted a crucial gap in Intercos’s industrial footprint within this segment. While the contract manufacturer operates two makeup plants in the US, it currently lacks the necessary capacity in hair or skin care to attract the largest brands or emerging trendsetters, which, in the Western world, tend to originate predominantly from the States. Due diligence for the potential acquisition has not yet commenced, and a deal is not expected to close before the end of the year.
Founded in 1972 by its 82-year-old chairman, Dario Ferrari, Intercos is based in Brianza, Italy. Ferrari retains approximately a 32% stake in the company, which boasts a current market value of about €1.17 billion ($1.38 billion). Intercos serves as a vital strategic partner for major beauty brands, handling the development, production, and packaging of a wide array of beauty products across various categories.
Semerari credits Ferrari with pioneering a new business model in the beauty industry. Influenced by his mother, a chemist active in the skincare sector, Ferrari shrewdly recognized makeup as an impulse-purchase market. This insight led him to make substantial investments in research and development to provide clients with innovative products. A significant breakthrough came when Ferrari forged a strategic partnership with beauty titan Estée Lauder. As Semerari recounted, Ferrari’s team developed a cosmetic powder that captivated Leonard Lauder, leading him to summon Ferrari to New York to establish a joint venture.
The United States remains the leading global market for beauty products, driven by its massive consumer base, according to the Cosmetic, Toiletry & Perfumery Association. Despite a general rise in tariffs globally, Intercos has successfully shielded its clients from increased duties. This has been achieved through a flexible strategy of relocating production among its various plants in countries such as South Korea, Italy, and the US, ensuring continuous and cost-effective supply chains.
In August, Intercos adjusted its revenue forecast, anticipating growth this year to proceed at a "more moderate pace" compared to its earlier projection of 5% to 7% at constant exchange rates. For the first half of the year, sales increased by 5% to €525 million from the previous year, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) saw a robust 17% jump to €75 million. Analysts polled by Bloomberg forecast Intercos to generate an adjusted EBITDA of €154.9 million for the full year. Semerari expressed confidence in the company's ability to meet these current EBITDA estimates, despite acknowledging a general softness in the industry. He attributed this softness to consumer concerns over inflation and global uncertainty, which typically lead to a reduction in discretionary spending.
