18.5.10

Smashbox to be Acquired by Estee Lauder Companies

The Estée Lauder Companies Inc. (NYSE: EL)
announced today that it has signed a definitive agreement to acquire Smashbox
Beauty Cosmetics, Inc., a privately held, photo studio-inspired prestige
cosmetics company based in Los Angeles, California. The acquisition is expected
to close in July 2010, subject to certain conditions, including regulatory
approval. While terms of the deal were not disclosed, the Company said that the
transaction is expected to be accretive to earnings in fiscal year 2011, before
transaction and integration costs.

“The Estée Lauder Companies is the
ideal home for Smashbox,” said Dean Factor, co-founder and Chief Executive
Officer, Smashbox Beauty Cosmetics, Inc. “The Company possesses the scale and
vision to help transition Smashbox into its next phase of growth, and its track
record of nurturing and growing prestige brands is second to none. Moreover, we
share a similar cultural heritage and dedication to consumer-inspired innovation
and creativity. We expect to benefit greatly from The Estée Lauder Companies’
extensive knowledge in product development, operational execution, and
international marketing and distribution, and we look forward to the next great
period of growth for the brand.”

The Estée Lauder Companies will
collaborate with the Smashbox organization to develop a comprehensive
integration plan to transition Smashbox into The Estee Lauder Companies’ family
after closing. Dean Factor, co-founder and Chief Executive Officer, Davis
Factor, co-founder, Chief Creative Office and celebrity photographer, and Budd
Taylor, President, will each play key roles with respect to these activities and
the continued success of Smashbox. Smashbox will continue operating out of its
Los Angeles, California office.

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