Forbes Middle East | ECC Acquires Majority Stake In Egyptian-Based Beauty Platform Source Beauty For $5M
Egyptian Company for Cosmetics (ECC) has acquired a majority stake through a capital increase in the beauty platform Source Beauty for a value of $5 million, according to a company statement released Tuesday.
Source Beauty acquisition
The deal aims to enable both companies to transform the beauty industry in Egypt, the statement said.
“The funds will reinforce an accelerated digital and physical marketing strategy to reach a broader customer base, enhance customer retention and brand visibility, as well as expand the team,” Lydia Schoonderbeek, the founder and CEO of Source Beauty, said.
ECC will provide Source Beauty an opportunity to serve customers with improved and enhanced services, such as new product innovation and manufacturing know-how.
In 2021, Lorax Capital Partners acquired a minority stake in ECC, the statement said, adding that it will fund its growth strategies.
Sustainable beauty industry
The cosmetics and beauty sector is expected to expand by 4.75% annually from 2021 to 2025, indicating that the industry is recovering from the pandemic. MENA-based beauty companies are among the key participants in this global expansion sector.
Recently, customers have been less reliant on imported beauty products due to rising duties on international beauty items and a high need for variety, which has given way to local manufacturers.
“There is, therefore, a profound need to promote inclusivity, sustainability, availability, and affordability for the average Egyptian beauty consumer, the statement said. Schoonderbeek said the company will “continue to develop and work towards becoming Egypt’s largest multi-brand online beauty retailer.”
In 2020, American skincare and cosmetics company Estee Lauder announced obtaining all its electricity from renewable sources to reduce greenhouse gas emissions and combat climate change.
Meanwhile, French cosmetics giant L’Oréal has set aside $115.6 million for impact investing in solving important environmental issues and is using a major partnership to promote further and advance the company’s commitments to positive change, such as by becoming Expo 2020 Dubai’s official Beauty Products and Services Partner.
Big number
Egypt’s beauty industry is expanding at an exponential rate, with a market volume of $187.7 million expected by 2025, according to consumer data company Statista. The number of users in the beauty industry is forecasted to reach 22.7 million by 2025.
Key background
The number of mergers and acquisition (M&A) transactions in the Middle East and North Africa (MENA) area increased by 12% year-on-year in the first half of 2022, thanks to the engagement of private equity companies and sovereign wealth funds (SWF).
In 2021, the global value of M&A exceeded $5 trillion for the first time, breaking the previous $4.42 trillion set in 2007.