Industry speculation that makeup can be 2024’s hottest M&A goal is quickly becoming a reality.

The category, now years right into a post-pandemic rebound and still prestige beauty’s largest segment within the U.S., has seen a plethora of entrants — most of whom have grown each the general pie and their slices of it — exploring exit options.

Industry sources told WWD that Glossier, roughly a 12 months after its Sephora debut, has hired Morgan Stanley to explore options, including an initial public offering. Sources also say they’re not alone — Merit Beauty has reportedly tapped Goldman Sachs because it looks at a possible sale.

Glossier, Merit and Morgan Stanley declined to comment. Goldman Sachs didn’t immediately reply to requests for comment.

Makeup brand Jane Iredale can be working with Jeffries, sources said. Jane Iredale declined to comment, and Jeffries didn’t reply to requests for comment by press time.

All this follows WWD reports that Selena Gomez’s Rare Beauty jointly hired Goldman Sachs and Financo Raymond James to explore its options, while Kosas led the pack by hiring North Point because it weighs a possible sale.

“This second wave of makeup brands, post-Charlotte Tilbury and Anastasia Beverly Hills, have grown into the dimensions that a strategic buyer can be considering,” said one source. “You don’t wish to get too big for the strategics, either, and you ought to show that there’s still tons of runway on the table. That’s why a few of these more midsized brands are going out to market now.”

Like Glossier, Rare is known to be weighing up an initial public offering as a part of its exit strategy, given its size. The market is bubbling up again and last 12 months Il Makiage owner Oddity enjoyed a successful IPO. 

These are all brands of various size, north of that are $100 million. Sources say net revenues for Merit topped that figure last 12 months, while Glossier was on target to surpass $100 million in Sephora alone for its first 12 months with the LVMH Moët Hennessy Louis Vuitton-owned retail giant. Industry sources estimate that Glossier’s overall sales are around $275 million.

Sources think that given how much money Glossier has raised, an IPO could also be its only option. “It seems only the sooner investors in Glossier could really generate income versus the later ones,” one source said of a possible sale, making the case for a public offering.

“There are only a few mono-brand firms that go public in beauty, Oddity being an exception, which has more of a tech company. That said, Glossier has a number of tech investors on its cap table,” the source continued.

As for Rare Beauty, other sources pointed to potential hiccups with an IPO, including that it’s a single-brand company with a single founder in Gomez and single retail partner.

Those points have yet to hamper its growth. Rare Beauty is at a large $350 million, while Kosas is alleged to hit $120 million in net sales. 

One thing the entrants all have in common, though, is a younger core consumer. Merit, for instance, skews toward Millennials; Rare Beauty has captivated each Gen Z and Gen Alpha.

“It’s a possibility for strategics not only to widen their portfolios, but to age them down and to amass capabilities, and there’s some incredible brands on the market which are doing all of those things,” Kelly McPhilliamy, managing director of Harris Williams, told WWD in February.

Glossier, Merit, Rare Beauty and Kosas are all Sephora brands, which creates “an interesting dynamic,” said a source, who added that the brands’ commonalities shouldn’t necessarily impact valuations. “There’s a big percentage of all of the deals over the past few years which are Sephora brands. It’s not unusual for that be an attribute of a few of these prestige brands.”

Growth in makeup outpaced every other category in prestige beauty, in response to 2023 data from Circana. Cosmetics grew 15 percent, while skincare — the M&A darling of years past, culminating within the acquisitions of Deciem and Paula’s Selection, amongst others — grew 14 percent.