cosmetics

Gryphon Carves RoC from J&J

by

Gryphon Investors has acquired RoC Skincare, an anti-aging skincare brand, from Johnson & Johnson Consumer.

RoCs’ anti-wrinkle and anti-aging skincare products are designed to reduce signs of facial aging including wrinkles, dark spots, and dullness of skin. RoC was created in 1957 by French pharmacist Dr. Jean-Charles Lissarrague and was the first brand to stabilize Retinol, a dermatologist-recommended cosmetic ingredient for improving the appearance of aging skin.The company’s more than 75 products are primarily manufactured in France and sold in the US, Europe, and Latin America through the mass, drug, club, specialty, e-commerce, and pharmacy channels. Key customers include Walmart, Target, CVS, Walgreens, Costco, Ulta, and Amazon. RoC is headquartered in New York (www.rocskincare.com).

As part of the carve-out transaction, Steve LaMonte and Michelle Taylor, executive advisors to Gryphon, will be recruiting a senior management team to lead RoC under Gryphon’s ownership.

“RoC has a rich history of skincare solutions innovation stemming from its French pharmacy roots,” said Matt Farron, a principal at Gryphon. “As the first brand to stabilize Retinol, which is one of the top US dermatologist-recommended cosmetic ingredients for improving the appearance of aging skin, RoC continues to be one of the largest brands solely focused on anti-aging skincare products. By leveraging the brand’s French pharmacy heritage and track record of clinically proven innovation, we see numerous opportunities to expand RoC’s product offering to establish it as a brand with complete skincare solutions leading to increased market share.”

Gryphon makes leveraged acquisitions and growth investments in middle-market companies. The firm invests from $50 million to $200 million of capital in companies with sales from $100 million to $500 million. Sectors of interest include business services, consumer and retail, automotive, chemical, general manufacturing, healthcare and hotels. The buy of RoC is the second investment made by Gryphon in the beauty sector after the firm acquired color cosmetics brand Milani Cosmetics in June 2018.

Gryphon closed its fourth private equity buyout fund, Gryphon IV LP, in November 2016 at $1.1 billion, and raised a $100 million captive mezzanine fund, Gryphon Mezzanine Partners LP, in August 2017. Gryphon Investors is based in San Francisco (www.gryphoninvestors.com).

“We are excited to build on RoC’s past to connect with today’s customers. We see opportunities to expand the portfolio beyond Retinol and anti-aging, improve product support in international markets, strengthen links with the dermatology community, and drive customers into stores with creative, technology-driven product launches and marketing efforts,” said Mr. LaMonte. “We also plan to boost RoC’s engagement with all age groups. In addition to RoC’s core customer demographic of women aged 40+, millennials are showing great interest in the category and have responded positively to product trials.”

Sawaya Partners (www.sawayapartners.com) was the financial advisor to Johnson & Johnson. Luc-Henry Rousselle at LSH Partners was Gryphon’s financial advisor.

© 2019 Private Equity Professional | January 23, 2019

Tengram Buys Lime Crime

by

Lime Crime, one of the first digitally-native beauty brands, has been acquired by Tengram Capital Partners.

Lime Crime is known for its vibrant, cruelty-free and vegan products which include eyeshadows, lipsticks, blushes and powders, and hair colors. The company sells its products online and through leading retailers including Bloomingdales, Riley Rose and Ulta.com. Lime Crime was founded by Doe Deere (real name Xenia Vorotova) and Mark Dumbelton in 2008 and is headquartered in Los Angeles (www.limecrime.com).

With the acquisition of Lime Crime closed, Stacy Panagakis, formerly the General Manager of beauty brand Fresh, has been named as the company’s new Chief Executive Officer. Sasha Valentine, Lime Crime’s Chief Creative Officer, will continue in her current position. Doe Deere, Lime Crime’s co-founder, has transitioned out of day-to-day operations and has joined the company’s board of directors.

“I’m delighted to be joining the company at this pivotal moment,” said Ms. Panagakis. “Lime Crime is a millennial brand with a message that resonates with women everywhere – ‘it’s OK to be bold, experiment and have fun!’ The partnership with Tengram is an important next step in the brand’s evolution, bringing deep industry expertise and greater opportunities to offer unicorns and women everywhere the Lime Crime magical universe. As we expand the brand’s footprint and offerings, Lime Crime will continue to be a brand that stands apart, fulfilling its mission to revolutionize makeup, empower women and smash traditional boundaries.”

Tengram’s goal is to triple the size of the brand over the next five years through new product development and expansion into new categories. In 2017 Lime Crime had revenues of approximately $30 million.

“Lime Crime is truly unique among beauty brands, with a powerful following and a deep understanding of its consumers and their expressive approach to cosmetics,” said Richard Gersten, Partner at Tengram. “We have tremendous appreciation for what Doe, Sasha Valentine and the team have built over the past ten years: a revolutionary brand that empowers consumers to express themselves and inspires them to push past the traditional limits of beauty. In an era of beauty brand proliferation, Lime Crime’s authenticity and innovation stands above the rest. Lime Crime is a tremendous fit in our strong portfolio of beauty brands, and we look forward to leveraging our experience to help the Lime Crime team achieve its growth prospects.”

Tengram invests in companies in the branded consumer products and retail sectors. Specific areas of interest include apparel, sporting goods, consumer electronics, home furnishings, health & beauty, spirits, and food & beverages. Tengram’s current beauty portfolio includes ReVive, Algenist, specialty beauty retailer Cos Bar, and natural beauty brand This Works. The firm was founded in 2010 and has offices in Westport, CT and New York City (www.tengramcapital.com).

© 2018 Private Equity Professional | June 19, 2018

Gryphon to Acquire Milani Cosmetics

by

Gryphon Investors has agreed to acquire a majority equity interest in Milani Cosmetics from current owners Ralph Bijou and Laurie Minc who will maintain a minority equity interest in the company.

Milani Cosmetics is a “masstige” beauty company that markets its face, lip and eye products under the Milani and Jordana brands. Masstige is a marketing term and is a portmanteau of the words mass and prestige and has been described as “prestige for the masses.” Masstige products are defined as “premium but attainable” and are considered luxury or premium products that have price points between mid-market and super premium.

Milani Cosmetics began with the creation of Jordana Cosmetics in 1986 and grew with the purchase of Milani in 2001.  Milani’s products are available in 75 countries and are sold through retailers including Walmart, Walgreens, Ulta, Target and CVS. The company is headquartered in Los Angeles (www.milanicosmetics.com).

Upon closing of the transaction next month, Michelle Taylor will become interim CEO of Milani Cosmetics. Ms. Taylor is a Gryphon Executive Advisor and has experience as an executive in the cosmetics and beauty industry. She previously held senior leadership positions at Kate Somerville Skincare, Kiehl’s, Lancôme, L’Oréal USA, Chanel, and Elizabeth Arden. “Milani is the ‘masstige’ brand of choice for consumers who seek out innovative, high-quality makeup at affordable prices,” said Ms. Taylor. “That reputation has driven the company’s rapid growth both internationally and domestically, where it was one of the fastest growing mass brands in the US over the past year. Gryphon’s expertise and financial resources will be key as Milani looks to expand its market presence in an ever-changing and keenly competitive landscape.”

The buy of Milani is Gryphon’s first investment in the beauty sector. “Gryphon has long been exploring the $45 billion beauty and personal care space and is excited to commit to the industry,” said Dennis O’Brien, a Partner of Gryphon. “Leveraging Michelle’s deep knowledge of the sector, we believe we have identified a strong growth platform in Milani, one which has a variety of proven and developing sales channels and the opportunity to reach a broad and growing consumer base that has discovered Milani’s quality and is actively seeking out the brand. We look forward to working with Michelle, Ralph, and Laurie to build upon the company’s proven success.”

Gryphon Investors makes leveraged acquisitions and growth investments in middle-market companies. The firm invests from $50 million to $200 million of capital in companies with sales ranging from $100 million to $500 million. Sectors of interest include business services, consumer and retail, automotive, chemical, general manufacturing, healthcare and hotels. Gryphon closed its fourth private equity buyout fund, Gryphon IV, in November 2016 at $1.1 billion, and raised a $100 million captive mezzanine fund, Gryphon Mezzanine Partners, in August 2017. Gryphon Investors is based in San Francisco (www.gryphoninvestors.com).

Mr. Bijou will continue with the company as President of Jordana Cosmetics and Laurie Minc will continue with Milani as a Senior Advisor.

Moelis & Company was the financial advisor to Milani and Financo advised Gryphon.

© 2018 Private Equity Professional | May 18, 2018

MidOcean Acquires BH Cosmetics

by

MidOcean Partners has acquired BH Cosmetics, a direct-to-consumer color cosmetics brand focused on the Millennial/Generation Z consumer.

BH Cosmetics provides a full suite of color cosmetics including products for the face, lips, eyes, brows as well as brushes and accessories. Part of the company’s marketing strategy is to maintain a worldwide social media following across multiple platforms and the company utilizes an active influencer network to drive brand awareness and customer acquisition. BH Cosmetics was founded in 2009 and is headquartered in Los Angeles (www.bhcosmetics.com).BH Cosmetics will continue to be led by its founders Fred Sadovskiy (CEO), Kirill Trachtenberg (Chief Strategy Officer), and Robert Sefaradi (COO), each of whom have maintained an equity ownership in the company alongside MidOcean.

“We are incredibly excited to partner with BH, a leading color cosmetics brand with a strong direct-to-consumer and digital marketing business model and multiple levers for continued growth,” said Jonathan Marlow, Managing Director at MidOcean. “MidOcean has significant experience building strong consumer brands with founder-owned businesses and we believe that BH Cosmetics has substantial opportunities for continued growth and expansion fueled by appropriate investments in people, infrastructure and marketing. We see numerous opportunities to increase BH’s presence across channels and geographies and look forward to working with Fred, Kirill, Robert and the talented team at BH to drive this growth.”

The buy of BH Cosmetics is another in a line of investments made by MidOcean in the beauty sector. In August 2015 the firm acquired Image Skincare, a seller of moisturizers, cleansers, eye cremes, masques, peels and foundations based in Lantana, FL (www.imageskincare.com); and in June 2017 it sold Agilex Fragrances (www.agilexfragrances.com), a Piscataway, NJ-based provider of fragrance products and related creative and technical services, to Firmenich, the world’s largest privately-owned company in the fragrance and flavor business.  MidOcean acquired Agilex in December 2012.

“We are very excited to begin our partnership with MidOcean,” said Mr. Sadovskiy. “MidOcean has tremendous resources and experience building branded consumer products platforms and has a proven track record of helping take founder-led consumer businesses to the next level. We are confident that MidOcean will be an excellent partner for BH as we look to continue BH’s expansion in the color cosmetics market.”

MidOcean invests in middle market companies active in the business and consumer services sectors.  The firm was founded in 2003 and is based in New York (www.midoceanpartners.com).

Los Angeles and New York-based investment bank The Sage Group (www.sagellc.com) was the financial advisor to BH Cosmetics.

© 2018 Private Equity Professional | January 5, 2018

TSG Consumer Invests in Huda Beauty

by

TSG Consumer Partners has acquired a minority stake in Huda Beauty, a cosmetics branded founded by Huda Kattan in 2013.

Huda Beauty’s product line began with false eyelashes and has expanded since founding to include a full range of beauty products including lip contours, liquid mattes, lashes, and eyeshadow palettes. The company’s products are sold online at ShopHudaBeauty.com and also through major retailers such as Sephora, JC Penney, Harrods, Selfridges, and Cult Beauty. Huda Beauty is based in Dubai, UAE (www.hudabeauty.com).

“TSG understands exactly who we are as a brand and values our authenticity and close relationship with our customer,” said Ms. Kattan. “Huda Beauty has evolved from our beginnings as a nimble startup, and now enjoys sustained, exponential growth and we trust TSG to help us build on this momentum by expanding product assortments and distribution in the most thoughtful way.”

Ms. Kattan has become a top beauty influencer with a social media following of over 27 million people and was named one of Forbes’ “Top 2017 Influencers in Beauty” and TIME’s “Most Influential People On The Internet”. “We feel incredibly honored to partner with Huda Kattan and her team,” said Colin Welch, a Managing Director at TSG. “We’ve invested in the beauty sector for over ten years and have seen a marked shift in the way consumers engage with brands. Consumers today want an authentic connection with a founder and to feel as though they are part of something much larger than themselves. Huda’s unprecedented social community enables them to do just that.”

TSG Consumer Partners makes control and non-control investments of $15 million to $100 million in companies with EBITDAs of $3 million to $50 million where there is an opportunity to create value by extending brand, expanding distribution and improving operations. Sectors of specific interest include the food, beverage, restaurant, beauty, personal care, household, apparel & accessories, and ecommerce sectors. The firm has $5 billion of assets under management and is headquartered in San Francisco (www.tsgconsumer.com).

“Huda Beauty’s unrivaled digital reach, global influence and best-in-class product offering help women worldwide look and feel their best every day,” said Hadley Mullin, a Senior Managing Director at TSG. “We are thrilled to join forces with Huda Beauty, which is poised for significant global expansion, fueled by Huda’s passion and commitment to her ever-expanding consumer community.”

Financo (www.financo.com) was the financial advisor to Huda Beauty and Moelis & Company (www.moelis.com) was the financial advisor to TSG.

© 2017 Private Equity Professional | December 14, 2017

Tengram Buys RéVive

by

Tengram Capital Partners has agreed to acquire luxury skincare brand RéVive from Shiseido Americas Corporation. RéVive was acquired by Shiseido Americas as part of its 2016 acquisition of Gurwtich Products from Alticor. Closing is expected to be completed by the end of November.

RéVive is a luxury skincare line developed by Dr. Gregory Bays Brown, a plastic and reconstructive surgeon. Launched in 1997, RéVive is distributed domestically at luxury retailers such as Neiman Marcus, Saks, Bergdorf Goodman, Barney’s, Blue Mercury and Cos Bar and at other retailers in Canada, the UK, Europe and Asia (www.reviveskincare.com).

The new company will be led by Elana Drell Szyfer, the ex-CEO of Laura Geller New York, a cosmetics brand and a former portfolio company of Tengram, which the firm sold in 2016. Ms. Drell Szyfer joined Laura Geller in 2014 from Kenneth Cole where she was EVP of Global Brand Strategy. She has over two decades of experience in the beauty industry having worked at Estee Lauder, L’Oreal, and Avon.  At Estee Lauder, she held the role of Senior Vice President of Global Marketing for the Estee Lauder brand, and prior to that, Vice President of Global Marketing for Prescriptives. She then spent three years at AHAVA Dead Sea Laboratories (a cosmetics company), where she was Chief Executive Officer.  Ms. Drell Szyfer is currently an Operating Advisor with Tengram.

Ms. Drell Szyfer will be joined at RéVive by John Elmer who will become the brand’s new CFO and COO (Mr. Elmer served in this same role at Laura Geller) and Mary Rodrigues, an experienced beauty industry executive, will be the SVP of Marketing and E-commerce.

“We are delighted to add RéVive to our strong and growing portfolio of beauty brands,” said Richard Gersten, a Partner at Tengram Capital. “As an investor in consumer brands with a deep knowledge in beauty, I have watched RéVive for a long time. We believe it is a gem, thanks to Founder Dr. Gregory Bays Brown, its exceptional products based on Nobel prize-winning technologies, a loyal consumer following, and its impressive distribution. The RéVive brand has strong growth prospects, and we look forward to investing in key areas to enable the brand to thrive.”

Tengram invests in companies in the branded consumer products and retail sectors. Specific areas of interest include apparel, sporting goods, consumer electronics, home furnishings, health & beauty, spirits, and food & beverages. Tengram’s current beauty portfolio includes Nest Fragrances, Algenist, specialty beauty retailer Cos Bar, and natural beauty brand This Works. The firm was founded in 2010 and is based in Westport, CT (www.tengramcapital.com).

“RéVive has always been known for the quality and efficacy of its products. Its performance and positioning is well poised to appeal to a discerning skincare consumer domestically and internationally via both current and new channels of distribution,” said Ms. Drell Szyfer. “Finding a brand like RéVive is rare – we are extremely excited about the opportunity to partner with the existing team, partners and of course, Dr. Brown.”

As part of the purchase agreement, Shiseido Americas will continue to provide supply chain, distribution and other support services during the transition. “RéVive is a wonderful skincare brand. We are confident it will be well supported by Tengram while Shiseido focuses on continuing growth across our strategic portfolio of brands and businesses,” said Marc Rey, President and CEO of Shiseido Americas.

Shiseido Americas is a subsidiary of Tokyo-based Shiseido Company (TSE:4911), a global beauty company which brands include Shiseido, NARS, Clé de Peau Beauté, bareMinerals, Laura Mercier and several fragrance brands including Issey Miyake, Narciso Rodriguez and Dolce & Gabbana. Shiseido Americas is headquartered in New York (www.shiseido.com).

© 2017 Private Equity Professional | November 13, 2017