Coty to Buy Younique, Valuing Cosmetics Startup at $1 Billion

By Khadeeja Safdar and Sharon Terlep 

The next Avon lady could be in your Instagram feed.

Younique LLC, a social-media-driven cosmetics company that sells products through about 200,000 "presenters," on Tuesday agreed to be acquired by Coty Inc. in a transaction that values the four-year-old startup at $1 billion.

Coty, based in New York, said it plans to buy 60% of Younique for $600 million in cash. Younique's founders, siblings Derek Maxfield and Melanie Huscroft, will own the remaining 40% and stay with the company as its chief executive and chief visionary officer, respectively.

Coty is the latest consumer products maker to scoop up an online upstart allowing it to sell products directly to customers and sidestep department stores and specialty retailers such as Sephora and Ulta. Last year, Unilever paid $1 billion to acquire online razor seller Dollar Shave Club.

Coty in 2015 bought parts of Procter & Gamble Co.'s beauty business , including CoverGirl makeup and Clairol hair dye, for about $13 billion, an effort to grow its footprint in the sector.

The Younique acquisition is expected to close at the end of Coty's fiscal third quarter.

Write to Khadeeja Safdar at [e-mail] and Sharon Terlep at [e-mail]

(END) Dow Jones Newswires

January 10, 2017 11:26 ET (16:26 GMT)

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