Ulta Beauty (ULTA) has taken a major step in its global expansion strategy by acquiring UK-based high street beauty chain Space NK. The move marks Ulta’s official entry into the British market and positions the U.S. cosmetics retailer to compete more directly in the international premium beauty space.
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Space NK, founded by beauty expert Nicky Kinnaird, runs 83 stores in the UK and Ireland. It sells a range of premium beauty and fragrance products in-store and online.
The Deal Rationale
Ulta Beauty has reached an agreement with Manzanita Capital, the parent company of Space NK, to acquire the UK-based beauty chain in a deal valued at over £300 million, according to sources familiar with the matter. Ulta is funding the deal with a combination of cash on hand and its existing credit facility. However, the exact purchase price has not been disclosed.
This deal allows Ulta Beauty to enter the growing UK beauty market by partnering with an already successful brand. International expansion is a key part of Ulta’s strategy, and along with its efforts in Mexico and the Middle East, the company is building a stronger global foundation for long-term growth.
Meanwhile, Space NK began receiving offers from potential buyers in May. At the time, its owner, Manzanita Capital, was reportedly seeking an attractive offer, with the expected deal value ranging between £300 million and £400 million.
Is Ulta Beauty Stock a Good Buy?
On TipRanks, ULTA stock has a consensus Moderate Buy rating among 25 Wall Street analysts. That rating is based on 13 Buys, 11 Holds, and one Sell assigned in the last three months. The average Ulta Beauty stock price target of $486.52 implies a 2.3% upside from current levels.
