L’Oreal has signed an agreement with Castanea Partners to acquire Urban Decay cosmetics. The deal, subject to regulatory approval, is expected to be finalized by the end of this year. Urban Decay will report to Carol Hamilton, President of L’Oreal Luxe USA.

Urban Decay, based in Newport Beach, California, was created in 1996 by Wende Zomnir. The brand quickly became known for its edgy makeup colors. Now, Urban Decay’s star products include an eye palette, called Naked Palette; and the new Naked Skin weightless liquid makeup.

Urban Decay is distributed in the self-service retail channel, at retailers such as Ulta and Sephora, which represents one of the fastest growing segments in the U.S. luxury retail market. In the fiscal year ended in June 2012, Urban Decay recorded net sales of 130 million dollars.

“Urban Decay will beautifully complement L’Oreal’s luxe’s portfolio of iconic brands. It is the make-up specialist [specialty brand] we needed to fully satisfy young women in search of playful colors and inspiration in selective distribution, at an accessible price point,” said Nicolas Hieronimus, president, L’Oreal Luxe. “It is totally additional to our existing propositions, and as such it will contribute significantly to the growth of the Division in the years to come,” he added.

Frederic Roze, CEO, L’Oreal USA said, “Thanks to the acquisition of Urban Decay, the Group will strengthen its position in two very dynamic distribution channels in the USA, ie assisted self-service and e-commerce. We look forward to this new and exciting opportunity.”

Tim Warner, general manager, Urban Decay, also commented: “L’Oreal’s strong innovation capabilities and presence in every channel of distribution will enable Urban Decay to reach its full potential in the marketplace. Together, we have great ambitions for the future.”