Beauty products maker Coty (COTY) will purchase a 60% majority stake in private cosmetics retailer Younique for roughly $600 million, subject to approval, as it looks to grow its e-commerce platform.
The online peer-to-peer social selling company's founder and CEO Derek Maxfield, and chief visionary officer Melanie Huscroft, now holding a 40% stake, will remain in their leadership roles at Lehi-Utah-based Younique, Coty said in a statement Tuesday.
Coty will fund the purchase through a combination of cash on hand and debt. The companies expect to close the deal during Coty's 2017 third quarter.
"Younique is a peer-to-peer selling platform that offers content, social engagement and e-com for Younique branded products," Piper Jaffray analysts Stephanie Wissink and Lauren M. Wolff said in a research note Tuesday. "The site infrastructure was built specifically for mobile interaction, which has become the preferred shopping method for teens and millennials."
Shares of Coty were almost flat midday Tuesday trading up a cent to $18.86. The company has a market cap of $13.6 billion.
Founded in 2012, Younique sells makeup and skin care products through a disruptive peer-to-peer ecommerce platform. The company's products are sold by 200,000 independent presenters directly to consumers through social media, according to the company.
Younique said it serves more than 4.1 million customers in 10 countries including the U.S., U.K., Canada and Australia. The company expects to generate $400 million in revenue for the full-year 2016.
"Derek and Melanie are tremendous entrepreneurs who have built one of the most engaging and fastest growing e-commerce companies in beauty," said Coty CEO Camillo Pane in a statement. "Alongside the rest of Younique's team and in partnership with their presenters, they have been able to impact the lives of millions of consumers across a number of companies with a mission to uplift and empower women."