cosmetics

Encore Invests in Cosmetics Company

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Encore Consumer Capital has made an investment in LORAC Cosmetics, a cosmetics brand founded by celebrity makeup artist Carol Shaw.

LORAC is an Hollywood-inspired brand that uses high-quality, gentle formulations across all color cosmetic categories. The name of the company is a backwards spelling of the founder’s first name. LORAC is headquartered near Los Angeles in Valencia, CA (www.loraccosmetics.com).

“My colleagues and I at LORAC are excited to be partnering with Encore Consumer Capital. I am very proud of LORAC’s success, and look forward to working with the company’s new CEO, Tim McMeekan, to bring the brand to even greater heights. The best of LORAC is yet to come,” said Ms. Shaw, who will continue on as Founder, maintaining roles in product development and public relations.

Encore Consumer Capital invests exclusively in consumer products companies that have revenues between $10 million and $100 million and where it can utilize its own consumer experience and the expertise of its operating partners at Encore Associates, a strategic advisory firm to the consumer products industry. The firm has raised nearly $600 million in equity capital and invested in 24 platform companies.  Encore was founded in 2005 and is headquartered in San Francisco (www.encoreconsumercapital.com).

“We are thrilled to have the opportunity to be involved with this special brand that Carol Shaw first introduced to the world 20 years ago that has since earned a unique place in the prestige beauty world,” said Kevin Murphy, Managing Director at Encore Consumer Capital.  “I have great confidence that Tim McMeekan and the entire LORAC team will further enhance LORAC’s trusted relationships with its retail partners and customers through the introduction of the highest quality and most innovative products.”

Intrepid Investment Bankers advised LORAC. Intrepid is a specialty investment bank that provides M&A, capital raising and strategic advisory services to middle-market companies across various industry sectors. Intrepid was formed in 2010 by a group of senior professionals from Barrington Associates, a middle-market mergers and acquisitions advisory firm that was acquired by Wells Fargo in 2006. Intrepid is headquartered in Los Angeles (www.intrepidib.com).

Brownstein Hyatt Farber Schreck acted as legal counsel to Encore and Irell & Manella acted as legal counsel to LORAC.

© 2015 PEPD • Private Equity’s Leading News Magazine • 12-21-15

Another Cosmetic Contract Mfg. for Novacap

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KDC, a contract manufacturer of health and beauty-care products and a portfolio company of Novacap, has acquired Cosmetic Technologies.

Cosmetic Technologies is a contract manufacturer of cosmetics and personal care products. Services include product conceptualization, formulation, manufacturing, packaging, and warehousing. The company was founded in 1992 by its President Ron Lewis. Cosmetic Technologies operates from a 100,000 square foot facility near Los Angeles in Newbury Park, CA (www.cosmetictechnologies.com).

This transaction follows the acquisition last week by KDC of Kolmar, a New York-based formulator and manufacturer of color cosmetics, personal care and skincare products and, ten months ago, of ChemAid, a formulator and manufacturer of skincare, hair care, and bath & body products based in New Jersey.

KDC is a contract manufacturer of regulated and non-regulated personal care products with annual sales of approximately $650 million. The company has approximately 2,500 employees and has eight operating facilities.  KDC is headquartered near Montreal in Longueuil, QC (www.kdc-companies.com).

“Cosmetic Technologies is a relatively smaller acquisition than Kolmar, but it is nonetheless very strategic for KDC,” said Michel Coté, KDC’s Chairman and Senior Partner at NOVACAP. “It has an impressive track record of financial performance in recent years and is well positioned for continued long-term future growth. It also allows us to widen our manufacturing and servicing capabilities, and will contribute in the mid to long term to the success of all our clients, and to our positioning as an industry leader all over North America.”

Novacap, with $1.5 billion in assets under management, invests in middle market companies within traditional industries and in companies in the information and communication technologies sector.  The firm was founded in 1981 and is based in Quebec (www.novacap.ca).

The acquisition of Cosmetic Technologies is being financed by NOVACAP, through its NOVACAP Industries IV fund, and through its co-investors La Caisse de dépôt et placement du Québec; the Fonds de solidarité FTQ; Investissement-Québec; Export Development Canada; and Fondaction CSN.  Novacap and its co-investors initially invested in KDC in 2002.

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-22-15

Castanea Invests in First Aid Beauty

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Castanea Partners has acquired a minority interest in First Aid Beauty, a maker and marketer of skincare products.

First Aid Beauty, also known as FAB, offers a range of skincare products that include cleansers, exfoliators, moisturizers, serums and masks. FAB products are free of harsh chemicals and known allergens, and address skin concerns such as aging, dryness, redness, eczema, acne and sun protection. The company’s products are distributed through beauty retailer Sephora, as well as other domestic and international beauty retail and ecommerce retailers.  The company was founded in 2009 by Lilli Gordon and is based in Newton, MA (www.firstaidbeauty.com).

Steve Berg, Managing Partner at Castanea, and Janet Gurwitch, Operating Partner at Castanea and former Founder and CEO of cosmetics company Laura Mercier, will join First Aid Beauty’s board of directors.  “Lilli and the team have developed a differentiated brand in the prestige category with a compelling range of products,” said Ms. Gurwitch. “FAB has great potential, and we are thrilled to be part of the next stage of their growth.”

Castanea Partners invests from $15 million to $75 million in companies that operate in the consumer brands, marketing services, and information services sectors. Castanea participates in leveraged buyouts, growth and acquisition equity investments, and operationally challenging situations. The firm is currently investing from its fourth fund, a $600 million fund that targets companies with enterprise values up to $250 million. Castanea is headquartered near Boston in Newton, MA (www.castaneapartners.com).

“First Aid Beauty is uniquely positioned in the personal care and beauty industry, and is an exciting opportunity for Castanea,” said Mr. Berg. “We very much look forward to working closely with Lilli and the team to support the company’s continuing growth.”

“Having personally grown FAB every step of the way, I could not imagine a better partner than Castanea,” said Ms. Gordon.  “They embrace our brand philosophy and have a deep understanding of the sector and a proven track record.”

Financo, an investment bank based in New York (www.financo.com), served as the exclusive financial advisor to First Aid Beauty.

© 2015 PEPD • Private Equity’s Leading News Magazine • 7-27-15

General Atlantic Acquires Too Faced Cosmetics

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General Atlantic has agreed to acquire Too Faced Cosmetics from Weston Presidio which first invested in the company in January 2012. The founders and senior management team of Too Faced will retain ownership in the company.

Too Faced is a cosmetics company that serves women ages 18 to 35 with an array of products including lipstick, eye shadow, mascara, and foundations.  The company’s products are sold in over 1,200 retail locations in the US and over 500 international locations across 25 countries. Too Faced was founded in 1998 by former celebrity makeup artist Jerrod Blandino and Jeremy Johnson. The company is headquartered in Irvine, CA (www.toofaced.com).

“Too Faced is one of the largest independent cosmetic brands with phenomenal momentum led by an outstanding and deep management team,” said Andrew Crawford, Managing Director and Global Head of General Atlantic’s Retail & Consumer sector. “With such a prominent presence in specialty beauty retail, Too Faced is uniquely positioned to capitalize on this channel’s growing popularity with consumers. We look forward to working with Too Faced’s proven management team, led by industry game changers Jeremy and Jerrod and President Eric Hohl. Their passion for innovating beauty is unrivaled and has driven extraordinary business success.”

As part of this transaction, beauty industry executive Ken Stevens will join Too Faced as its new chairman of the board.  Mr. Stevens was the former chairman of Ulta Beauty, former chief executive officer of Philosophy, and former president of Bath & Body Works.

“We are so grateful to our customers who have fueled our growth from a small indie brand to a fixture within the beauty industry,” said Jeremy Johnson, Co-Founder and Chief Executive Officer of Too Faced.  “To continue our growth trajectory, we were seeking a global thought leader experienced in partnering with founder-led, high growth companies, and the team at General Atlantic was a natural fit.  Their experience will help us accelerate our expansion as we invite even more women around the world to ‘own their pretty.'”

General Atlantic is focused on providing capital and strategic support to growth companies. The firm was founded in 1980 and manages approximately $18 billion in capital. General Atlantic has more than 100 investment professionals based in New York, Amsterdam, Beijing, Greenwich, Hong Kong, London, Mumbai, Munich, Palo Alto, Sao Paulo and Singapore (www.generalatlantic.com).

Financing for the transaction is being arranged by KeyBanc Capital Markets.

Too Faced was advised by Piper Jaffray, Intrepid Investment Bankers, and Kirkland & Ellis.  General Atlantic was advised by Financo and Paul, Weiss, Rifkind, Wharton & Garrison.

© 2015 PEPD • Private Equity’s Leading News Magazine • 6-9-15

Tengram Invests in This Works

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Tengram Capital Partners has made an investment in This Works, a maker and seller of aroma-therapeutic beauty products.

This Works is a natural beauty brand focused on developing, marketing, distributing, and selling aroma-therapeutic beauty products.  The company’s products are used in a variety of applications including body care, skincare, and sleep and are sold through health and wellness retailers, specialty beauty retailers, and third-party ecommerce retailers.  The company also sells its products through its corporate website. This Works was founded in 2003 by Kathy Phillips, currently the International Beauty Director for Condé Nast Asia and formerly the Health and Beauty Director of British Vogue.  The company is based in London, UK (www.thisworks.com).

“We are active investors in the beauty industry and evaluate a significant number of opportunities in the sector. We found This Works to be particularly compelling, given its great brand name, tremendous growth potential and unique, distinctive positioning. We are looking forward to working with the existing team to drive growth in the UK and to launch the brand in the US market,” said Richard Gersten, a Partner at Tengram.

The name “This Works” derives from the fact that each new product is tested and evaluated by a panel of 50 women of different ages and backgrounds who review products during the development process. The company will not launch a product until its panel of women tells them “this works.”

“Tengram has extensive beauty industry knowledge and a network of resources that will help build our business,” said Anna Persaud, the CEO of This Works.  “I look forward to working with them to build upon the brand’s strong momentum and execute on the company’s many growth opportunities.”

Tengram Capital Partners invests in companies in the branded consumer products and retail sectors. Specific areas of interest include apparel, sporting goods, consumer electronics, home furnishings, health and beauty, spirits, and food & beverages. Tengram was founded in 2010 by William Sweedler and Matthew Eby and is based in Westport, CT (www.tengramcapital.com).

2015 PEPD • Private Equity’s Leading News Magazine • 5-7-15

Mason Wells Exits Paris Presents

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Mason Wells has closed the sale of Paris Presents, a provider of branded personal care products, to Wasserstein & Co. Paris Presents was a portfolio company of Mason Wells Buyout Fund III, LP.

Paris Presents is a merchandiser, designer and developer of branded personal care products including cosmetic and bath accessories to domestic and international mass retailers, national and independent drug stores, specialty beauty stores, grocery stores and e-commerce retailers.  The company’s brands include Real Techniques, Eco Tools and Body Benefits.  Paris Presents was founded in 1947 and is based in the Chicago suburb of Gurnee, IL (www.parispresents.com).

“This sale concludes a highly successful partnership with the outstanding management team at Paris Presents, led by CEO Patrick O’Brien,” said Kevin Kenealey, Senior Managing Director at Mason Wells.  “Under our ownership, Paris Presents has emerged as one of the fastest growing branded personal care companies.  The management team established the company as a leader in its categories through world-class product innovation, consumer insights, leading edge marketing strategies, and operational excellence.  The momentum behind the company’s flagship brands, Real Techniques, Eco-Tools and Body Benefits, has the business poised for continued exceptional growth both domestically and internationally under the new ownership of Wasserstein.”

Mason Wells makes investments in Midwest-based companies with revenues of $25 million to $300 million and EBITDAs of at least $5 million. Sectors of interest include consumer packaged goods, packaging materials & converting, outsourced business services, and engineered products & services.  The firm is currently investing through Mason Wells Buyout Fund III, a $525 million fund.  Mason Wells was founded in 1982 and is based in Milwaukee (www.masonwells.com).

“The teamwork and chemistry between my management team and Mason Wells was extraordinary,” said Patrick O’Brien, CEO of Paris Presents.  “The support of Mason Wells on all levels helped us to further establish Paris Presents as a best-in-class company in its categories.  We are very excited to continue to grow and expand the business under the ownership of Wasserstein.”

Wasserstein & Co. is focused primarily on leveraged buyout investments and related investment activities in the media, consumer products and water equipment and services industries.  The firm has offices in New York and Los Angeles (www.wasserco.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 1-7-15