In the spirit of “if you can’t beat them, join them,” L’Oréal signed a definitive agreement this week to acquire NYX Cosmetics, a rapidly growing indie mass beauty brand.

With L’Oréal’s sales stalling in the nation’s mass channels, NYX offers sales growth and expansion opportunities. Terms of the deal were not disclosed, but industry insiders believe L’Oréal, which is on the prowl for further acquisitions and has the money to do so, paid about $500 million.

NYX sales soared 57 percent to $93 million for the 12-month period ended May 31, much of that produced in Ulta, the brand’s biggest partner.

In comparison, mass beauty sales actually declined in the first quarter of 2014, with Maybelline sales showing a 6% dip, Cover Girl down 3%, Revlon off 6% and Almay declining 6%. L’Oréal Paris volume was flat for the first quarter.

“The real industry growth is in brands like E.l.f. that offer value or NYX that has unique products,” said industry consultant Allan Mottus. He likened the deal to L’Oréal’s 2012 purchase of Urban Decay—both are edgy brands in their respective channels.

Calling L’Oréal “pretty good at seizing brands that are at the early stage of development and making them huge,” Jean-Paul Agon said Urban Decay will be a model for NYX.

Although mass market buyers said every brand that comes to their desk calls themselves the MAC of mass, they admitted NYX really is the closest thing the channel has. In particular, retailers cite a NYX product called The Curve, an ergonomically designed eyeliner retailing for $15 that they can’t keep in stock. In addition to cutting edge products, NYX has jumped out in front of competitors in the digital space with big followings on Instagram, Twitter and YouTube.

“NYX is a dynamic company that has done a tremendous job of harnessing the power of social media, digital marketing and multichannel distribution,” stated Frédéric Rozé, President and Chief Executive Officer of L’Oréal USA. “Both L’Oréal and NYX share a passion for innovation and a confidence in the strength and vitality of the color cosmetics market.”

Analysts said L’Oréal toyed with the idea of buying NYX for several months, actually backing off recently only to return with a deal in the 11th hour.

NYX is confident L’Oréal will maintain the company’s heritage. “NYX has seen tremendous growth in the last decade and I have complete confidence that L’Oréal will remain true to its brand identity and mission, which is to provide high quality, innovative professional cosmetics for women around the world,” stated Toni Ko, chairman and founder of NYX.

L’Oréal said NYX will remain in Los Angeles under the current management team led by chief executive officer, Scott Friedman. Buyers indicated they expect the brand will ultimately fall under the jurisdiction of Maybelline president David Greenberg.

Retailers call NYX, which has price points mostly in the $6 to $10 range, a brand that has successfully re-invented itself. Founded in 1999 by Toni, NYX achieved distribution during the last mass indie craze (late 1990s and early 2000’s) only to get caught in the retail and stock keeping consolidation crunch of the past five years. Fresh management helped the brand retrench thanks to products that distinguished it from competitors. NYX caught the attention of Ulta and has emerged as a major traffic pull on the mass side of Ulta stores. “They really hit it big with Ulta and rode to fame on their coattails,” said one analyst. Industry chatter overall circles around how NYX will appeal to the consumer who thinks she’s to yound to buy L’Oreal Paris, and who percieves herself as more edgy than how maybelline is positioned. 

Recently, Target added NYX to many of its renovated beauty departments. The brand is also featured in select CVS doors, as well as Bed, Bath and Beyond’s Harmon. NYX also has a healthy international presence, sold in more than 70 countries. Another attractive component, competitors noted, is NYX also operates a handful of its own boutiques, which harvests tremendous consumer trends and insights. “They have the total package. Strong social media where they can validate online as well as stores to get instant consumer insight,” said one competitive manufacturer. L’Oréal has the money to buy brands,” said Allan Mottus, referencing that the company is on course to spend more than $5 billion on acquisitions in the first half of 2104. Recently, the beauty giant bought Magic Holdings International, a maker of facial masks, as well as Decléor and Carita from Shiseido Co. L’Oréal also grew via acquisition in 1996 when it bought Maybelline, then with the purchase with Kiehl’s and then its more recent Urban Decay deal. Showing its interest in social media, L’Oréal also launched EM in conjunction with YouTube’s darling, Michelle Phan.

While there’s plenty of plusses for L’Oréal, retailers raised a few questions. First, will L’Oréal offer NYX to traditional drugstores? “It will be interesting to see how they present it to us, if at all,” said one retailer which does not carry the brand. Moreover, will NYX be too much of a duplication for L’Oréal’s existing brands. Buyers said one beef L’Oréal has had with the mass market is the concentration of brands that “copy” L’Oréal or Maybelline’s products at much cheaper prices. “Maybe owning NYX is how they hope to overcome this,” said a mass market buyer.