Shelley Sullivan sells discount make-up phenomenon MCoBeauty to Dennis Bastas

Make-up ‘dupe’ phenomenon MCoBeauty has been sold, with founder Shelley Sullivan cashing out in a massive deal.

MCoBeauty founder and chief executive, Shelley Sullivan. Picture: Richard Dobson

MCoBeauty founder Shelley Sullivan has sold her business to billionaire retail and pharmacy entrepreneur Dennis Bastas, after the make-up company’s revenue rocketed to about a quarter of a billion dollars last financial year.

The deal, with Mr Bastas’ DBG Health, is rumoured to be worth $500m, and value the business at $1bn. It follows DBG taking a half stake in the business in 2022.

Documents filed with the corporate regulator show Mr Bastas’ Vidacorp acquired the 500 shares in the company it did not own on January 17.

DBG, which owns Arrotex Pharmaceuticals and Vidacorp, is Australia’s largest privately owned healthcare products business, providing over-the-counter private label products and generic pharmaceuticals to chemists nationally.

Mr Bastas’ group also makes and sells consumer brands such as Nude by Nature, ESMI skin minerals, 28Go sports nutrition and a range of over-the-counter health brands through Apohealth and Chemists’ Own.

Pharmaceutical entrepreneur Dennis Bastas.

In a recent note to clients, Goldman Sachs estimated that MCoBeauty had reached $500m in retail sales in about five years, and a 2024 news report said the company was targeting about $250m in revenue for the 2024 financial year, quadrupling from the previous year.

MCoBeauty, founded by Ms Sullivan in 2016, makes duplicates, or “dupes”, of high-end cosmetics, which are sold through retail channels such as Woolworths and Big W at much lower prices than their high-end counterparts.

The company entered the US market in March last year, launching in 1800 Kroger stores.

“We launched online in 2020 with just six products under $40 and a promise to deliver the latest beauty innovations at an affordable price,’’ the company’s website says.

“Today, MCoBeauty is Australia’s fastest-growing beauty brand with over 500 products and a super-engaged community: from professional make-up artists to busy mums, savey-conscious students and beauty obsessives wanting quality skincare, make-up and tools at the best possible price.’’

Ms Sullivan is quoted on the website saying: “Our community is everything to us and we receive hundreds of messages from our customers begging us to make a particular product. So we listen and we deliver. It’s on-demand innovation through a luxe-for-less lens.”

Mr Bastas earned $101m in dividends from DBG last financial year.

The bulked-up DBG Health will be drawing the attention of investment bankers, with the MCoBeauty deal coming just as the merged Sigma Healthcare and Chemist Warehouse business will start trading on the ASX next Thursday, February 13, valued at well over $30bn.

Originally published as Shelley Sullivan sells discount make-up phenomenon MCoBeauty to Dennis Bastas