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Expert Voices: Jefferies’ Sasha Radic on how to prime beauty and wellness brands for their M&A moment

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May 10, 2024
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Photo Illustration: Tiffany Herring/Axios; Photo: Jeffries

Beauty and wellness stay resilient as consumers demonstrate willingness to spend on their health, Jefferies beauty banker Sasha Radic tells Axios.

Why it matters: Strategics and sponsors are energized by the massive growth potential of the category, whether in new products and formulations, or new markets and channels, she says.

Radic spoke with Kimberly as part of our Expert Voices series. The interview was edited for clarity, style and length.

What are the main consumer trends driving dealmaking and how has your advisory strategy evolved with that?

  • "They are highly consumable: there's omnichannel distribution, there's varied marketing of these products. It is very well-adapted to the modern digital age, and they're incredibly well-positioned in new social media environments like TikTok.
  • We're seeing aggressive portfolio reorganization amongst strategic buyers looking to add the next-generation brands to their portfolios, as well as shift away from certain brands that are no longer best-served within their portfolios."

When preparing companies to come to market, what areas of diligence are you advising them on?

  • "We spend a lot of time with companies establishing their positioning around their brand, differentiation, and their consumer connection.
  • On the regulatory [landscape], we provide visibility into how these brands have operated and driven their formulation claim, making sure that that's shored up in the diligence process.
  • We also give access to management teams to show the success and the connectivity to the broader organization."

We've seen strategic acquirers moving more downstream. How does that trickle down to funding for emerging beauty brands?

  • "Strategics are seeing that these brands are growing extremely quickly, that there's a lot to learn from these brands as they incubate and innovate. They're very close to their consumers.
  • Getting involved earlier is helpful for them as there are synergies on both sides. They can be helpful to brands earlier in their development as they think about distribution growth, and they can learn from these brands as they think about more modern marketing ... and how to drive better community within their ecosystem.
  • It has created more competition at earlier stages of investment."

Is there a profile for these brands that both strategic and sponsors are looking for?

  • "They're looking for brands that have durability of growth, that have a distinct point of view in the market that has a lasting point of differentiation.
  • Sometimes that comes down to unique product formulation or packaging, hero products that are really driving category leadership, real community around those brands, and significant whitespace to continue driving expansion going forward."

Any recent deals you're most proud of?

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