In brief:
- Start thinking early – proper planning allows you time to consider all your options, improve your position and ensures an efficient sale process.
- Get your house in order – especially when it comes to your assets, employees and financials.
- The devil is in the detail – whether that's how the data room is organised or ensuring that your business has kept filings up to date, it's these little things that can make a huge difference.
- Don't overlook tax – it can have a major impact on a sale if not watertight.
- Advisers play a crucial role – make sure you're working with the right people.
The beauty industry is booming, and big players are on the lookout for brands with strong foundations and standout appeal. If you want your own beauty brand to attract serious bidders, glide through diligence and secure a premium exit, preparation is everything.
This year’s headline acquisition of Space NK illustrates the point perfectly. Manzanita Capital, which acquired the business in 2002, had reportedly explored potential sales for several years. Yet it was not until April 2025 that Manzanita formally approached prospective buyers.
Despite that seemingly slow start, the sale to Ulta Beauty completed just two months later, with a reported deal value exceeding £300 million. That sort of pace is never down to luck; it is the result of a business being impeccably organised long before advisers even began drafting heads of terms.
With that in mind, here is what being genuinely deal-ready looks like.
The data room
Most transactions start with a data room: a secure online hub containing the documents and information that map out your business. Any well-advised purchaser will want a clear understanding of what they are acquiring and whether anything lurking beneath the surface will cost time or money to repair.
Buyers will want to understand the full mechanics of your brand; product formulations and ingredient lists, manufacturing and supply-chain agreements, retailer and distributor contracts and the influencer, PR and digital-agency relationships that drive your marketing.
Robust non-disclosure agreements are essential before granting access to such valuable details and any document containing personal data should be properly anonymised to avoid a GDPR scare.
Finance and tax
Long before a sale becomes a serious prospect, your financials should be in strong shape - from management accounts and stock levels to forecasts and cash-flow discipline.
Tax requires equal attention and too many brands underestimate its impact. Tax treatment must be consistent with your accounting, particularly around research and development and any claims for relief. VAT is also notoriously complex for beauty businesses, with product bundles, sampling, influencer gifting and cross-border sales among the common pitfalls.
Certain arrangements require especially careful scrutiny: share issuances, employee taxation, royalty structures and cross-border IP flows must all be watertight. Any mistakes can create unexpected tax exposures, which either depress the price or force the seller to provide protections.
Importantly, do not leave your own tax planning to the last minute. Early advice may open up restructuring opportunities to improve your own position that simply will not be available once negotiations begin.
Corporate housekeeping
The register of members and company records must be accurate and up to date and every share transfer, subscription and option grant should be properly documented. It may be time to revisit your articles or shareholders’ agreements and identify any drag, tag or consent rights that could impede a smooth exit.
Expect to provide copies of all key commercial agreements; check expiry dates and look out for change-of-control provisions which can threaten timetables. If your products contain restricted ingredients or sit in regulated categories (such as SPF or cosmeceuticals), ensure that licences and compliance evidence are current. Out-of-date regulatory documentation slows diligence and can weaken valuation.
Valuable assets
Every material asset, from real estate to intellectual property, should either be owned outright by the business or securely licensed to it. If founders, freelancers or agencies created brand assets, ensure that ownership has been formally assigned. Ambiguity equals risk, and risk invariably drives the price down.
People are equally critical. Every employee, contractor and consultant should have a signed agreement, with workforce disclosure supported by a clean, anonymised schedule detailing roles, pay, bonuses, benefits, start dates and locations. Any mistakes, such as a messy payroll or missing P11Ds, can turn a glossy headline valuation into something much less flattering.
Work with the right advisers
Above all, surround yourself with advisers who genuinely understand beauty deals. Transactions in this sector move quickly, expectations are high and the commercial dynamics are unique.
Mishcon de Reya’s Corporate and Tax teams regularly act for founders and investors across the beauty and wellness space, advising on everything from preparation and structuring to negotiation and completion.
In beauty, presentation has always mattered. When selling your business, it is not just about looking polished, it is about being watertight. The Space NK sale is a clear reminder of what becomes possible when a brand is both prepared and well-advised. Put in the work and you will accelerate the process, strengthen your negotiating leverage and ultimately secure a cleaner, more profitable exit.