Drugstore.com Applies Some Online Makeup
Online health, beauty, wellness, personal care and pharmacy concern Drugstore.com has agreed to acquire online cosmetic retailer Beauty.com for approximately 1.3 million shares of stock, worth about $42 million.
The acquisition will provide drugstore.com with access to a larger share of the $6.2 billion high-end "prestige" beauty market. It already sells lower-end cosmetics. Beauty.com will be operated as a sister store to drugstore.com, offering its customers the opportunity to buy Beauty.com's hundreds of cosmetics and fragrance brands.
Beauty.com will remain a separate brand, keep its URL and continue to create its own merchandising, marketing and editorial content from its current headquarters in New York City. It will continue to expand its content, producing authoritative advice from beauty experts such as Kevyn Aucoin, the celebrity makeup artist known for his work with Gwyneth Paltrow and others. Bellevue, Wash.-based drugstore.com will provide the operational infrastructure, technology and order-related customer service for Beauty.com.
Under the terms of the agreement, drugstore.com will acquire all of the outstanding stock and options and certain liabilities of privately held Beauty.com. A portion of the shares issued in connection with the merger will be paid out over a two-year period. The acquisition is expected to close in the first quarter of 2000 and is subject to certain closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act.
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