Tengram Capital Partners has agreed to acquire the hair care and skin cleansing business of High Ridge Brands, a portfolio company of Clayton, Dubilier & Rice.
High Ridge Brands was formed by Brynwood Partners in December 2010 to purchase the North American Zest personal cleansing brand from Procter & Gamble and to serve as a platform for further acquisitions in the personal care consumer segment. During its ownership Brynwood closed five add-ons including the buys of the Alberto VO5 brand in the US and Puerto Rico and the Rave brand worldwide from Unilever (August 2011); the Coast soap brand globally from Henkel (April 2012); the White Rain brand globally from Sun Products (July 2012); several small personal care brands from Newhall Laboratories (May 2015); and Continental Fragrances, the owner of the worldwide Salon Grafix and High Beams brands (October 2015).
Clayton, Dubilier & Rice (CD&R) acquired Stamford, Connecticut-based High Ridge from Brynwood in June 2016. In December 2016, under CD&R ownership, High Ridge acquired Dr. Fresh, a California-based provider of oral care products under the REACH (toothbrushes), Firefly (mouthwashes), and Binaca (breath fresheners) brands, from NexPhase Capital. In December 2019, High Ridge filed for bankruptcy protection after a pre-bankruptcy sales process launched in September 2019 failed to find a buyer for the business.
Yesterday, High Ridge announced that it had agreed to sell its hair care and skin cleansing business, including the Zest, Alberto VO5, Coast, White Rain, and Rave brands, to Tengram; and its oral care business, which includes the REACH, Firefly, and Dr. Fresh brands, to publicly traded Perrigo (NYSE: PRGO).
Under the terms of the purchase agreement, the consideration for the two businesses includes a cash payment to High Ridge of $120.5 million and the assumption by the buyers of working capital and substantially all go-forward liabilities of the businesses.
In addition, Tengram has announced that James Daniels, High Ridge’s former CEO from 2011 to 2017, will return to the company. “I’m thrilled to return to High Ridge and lead the company through this new chapter in partnership with Tengram,” said Mr. Daniels. “During my previous tenure, my focus was to provide our retail partners and the consumers we serve with innovative, benefit-rich personal care products at a compelling value. My immediate priorities will be to reinvest in our team, strengthen the relationships across our supply chain, and ensure that customer service is once again priority one. I can’t wait for our brands to regain their competitive position in the marketplace, and embark, with Tengram, on identifying other growth brands to add to the platform when appropriate.”
“The acquisition of High Ridge’s haircare and skin cleansing brands concludes a competitive auction process, in which Tengram was able to utilize its long track record of success in both restructuring and growing brand value in the consumer sector to facilitate the best bid,” said William Sweedler, co-founder and managing partner at Tengram. “With our transaction, High Ridge will have a flexible balance sheet to re-establish its market position and pursue potential growth opportunities. We plan to move quickly with Jim and his team to change the status quo, leverage the portfolio’s global recognition, and resume High Ridge’s growth.”
Tengram invests in companies in the branded consumer products and retail sectors. The firm was founded in 2010 and has offices in Westport, Connecticut and New York City.
New York and London-based CD&R invests in European and US-based businesses. Since founding in 1978, the firm has invested $28 billion in 86 companies across a range of industries numerous consumer health and medical device businesses.
The buy of High Ridge from CD&R is expected to close by the end of March 2020.
© 2020 Private Equity Professional | February 26, 2020
