MILAN, April 26 (Reuters) - LVMH-backed buyout firm L

Catterton has agreed to buy a majority stake in KIKO Milano in a

deal which a source close to the matter said valued the

family-owned Italian low-cost make-up group at around 1.4

billion euros ($1.5 billion) including debt.

L Catterton, which specialises in consumer goods is buying

the stake from Italy's Percassi family, which in 1997 founded

what is now one of the world's biggest privately-owned make-up

brands, the two companies said in a joint statement.

The Percassis will retain a "significant" stake in KIKO,

they added, without giving further detail.

The global beauty products market is expected to grow to

$128 billion by 2032 from $78 billion last year, Fortune

Business Insight predicts.

L'Oreal, meanwhile, forecast the market will add

around 600 million middle and upper-middle class consumers

globally by 2030, with demand growing in countries such as

China, Indonesia and Egypt, while staying solid among

baby-boomers in mature markets such as Europe or North America.

L Catterton has already invested in more than 30 beauty

brands, including Intercos, an Italian make-up manufacturer

supplying top luxury brands, UK skincare maker Elemis, Japan's

ETVOS, haircare brand Maria Nila and consumer-tech firm Oddity.

KIKO, whose revenues rose by 20% last year to around 800

million euros, runs more than 1,100 shops in 66 countries.

Its products, known for combining quality with an accessible

price, are attractively displayed to lure in customers,

especially younger ones.

"Innovative products' quality, accessibility, personalized

consultancy, and captivating packaging design stand as the

brand's distinctive elements," said KIKO CEO Simone Dominici.

KIKO also sells online and some of its products are best

sellers across all age groups.

Dominici said KIKO would expand in the United States with

the support of L Catterton and its senior adviser John Demsey -

a former Estee Lauder executive who developed the MAC

Cosmetics brand before resigning over an Instagram post scandal.

The Percassis, who hail from the northern Italian town of

Bergamo and own the Serie A soccer team Atalanta, also founded

barbershop products Bullfrog and men's cosmetics brand Womo.

Active in retail real estate, the Percassi group runs

commercial operations in Italy for companies such as Starbucks ( SBUX )

, Nike ( NKE ), Gucci and Victoria's Secret. With

offices across the world, the firm has 9,000 employees.

BNP Paribas, BofA Securities, Intesa Sanpaolo IMI CIB, law

firm Gatti Pavesi Bianchi Ludovici and Deloitte advised the

Percassi family. L Catterton worked with Bonelli Erede as legal

counsel and PWC.

($1 = 0.9304 euros)