BeautyMatter: Q2 2016 – Beauty Deals

 

In this latest article by Brand Growth Management, Partner KELLY KOVACK takes a look at the most exciting mergers and acquisitions happening now in the beauty world.

Kelly Kovak:

The M&A environment of the past couple years has become a waiting game of – what and who is next. This quarter was no different, but the deals are becoming a little harder to come by given the volume of activity in past quarters. The strategic needs for scale and growth, acquisition of capabilities, the ability to fill category, channel, and geography opportunities and the substantial buying power of private equity firms continue to be key M&A drivers.

However, this quarter saw the entry of a new type of player on the buy side – a niche brand. Beautycounter threw their hat into the ring with the acquisition of NUDE from LVMH. Could this be the next evolution of how niche brands achieve scale? Or was this a one-off transaction by a financially savvy brand with an appetite for risk doubling down on their business?

L’OREAL ACQUIRES ATELIER COLOGNE

WHO: Launched as an artisanal fragrance brand dedicated entirely to cologne in 2007 by co-founders Sylvie Ganter and Christophe Cervasel. The initial launch was limited to Bergdorf Goodman and select Neiman Marcus doors but has grown with distribution in 40 countries, including six owned stores in New York and Paris. The line has also expanded to include fragranced soaps, shower gels, body lotions and candles for the home.

L’Oréal Luxe is a division of L’Oréal comprised of a unique portfolio of 18 brands combining traditional beauty brands, couture brands, and alternative ‘new luxury’ brands.

WHY: Following Estee Lauder’s lead L’Oréal make its first niche fragrance acquisition. Unlike Lauder, they have never owned a fragrance label with its own retail doors.

DETAILS:
• The brand has six freestanding stores, of which three are in France, two in the U.S. and one in Hong Kong.
• Last year Atelier Cologne has closed a round of funding worth 5 million euros, or $5 million at current exchange.
• The brand’s wholesale revenues run between $55 million and $60 million annually as estimated
by industry sources in WWD.
• Atelier Cologne products are sold in more than 800 sales points in 40 countries and on e-commerce sites.
• Terms of the deal were not disclosed.

ROARK CAPITALS INVESTS IN DRYBAR

WHO: Founded by Alli Webb and her brother Michael Landau in 2008 the Los Angeles based Drybar has established itself as the market leader in the hot blow-dry market. It’s known for its stylish, high quality and affordable blow-dry services serving. Drybar has expanded through new salon openings as well as the introduction of a product line, which includes styling tools and products. Distribution Nordstrom, Sephora, Utla in April and QVC

Roark, headquartered in Atlanta, has a history of investing in franchised and multiunit companies in the retail, restaurant, consumer and business services sectors.

WHY: The business continues rapid expansion. “The experience and resources they provide will be enormously valuable as we continue to expand across the globe,” said Drybar chairman and co-founder Michael Landau. “Drybar is an innovative and differentiated brand with a tremendous track record of growth,” said Steve Romaniello, managing director at Roark Capital. “We look forward to supporting the team and the continued growth of the Drybar brand.”

DETAILS:
• Roark Capital Group made a minority investment in Drybar.
• According to the company the Drybar’s products business is set to grow 73 percent year-over-year and comprise 26 percent of the company’s revenue for 2016.
• The business has a plan to open 10-12 more locations by the end of 2016.
• Roark will become part of the Drybar board.
• Terms of the deal have not been released.
• Not including this investment Drybar has raised more than $50 million of capital to date.
• Piper Jaffray & Co. advised Drybar on the investment.

BEAUTY COUNTER ACQUIRES NUDE

WHO: NUDE Brands, Ltd. Founded by Ali Hewson, NUDE’s line of natural, high-performance beauty products was previously part of the LVMH portfolio. NUDE is known for its Beautiful Without™ formulation standards. NUDE products are currently available in the US on Sephora.com, across Europe in Space.NK stores and online, in Australia in Mecca stores and Mecca.com.

Beautycounter launched in 2013 as a direct-retail brand that is now available through 20,000+ consultants across North America, online at Beautycounter.com, and through strategic partnerships including J.Crew, goop, and a limited-edition collection with Target launching Fall 2016. Known for its Never List™ of more than 1,500 ingredients banned when creating its products.

WHY: The companies formulation philosophies, focus on ingredients and brand missions are closely aligned. As quoted in WWD, “We were not actively looking to acquire a company,” said Beautycounter chief executive officer Gregg Renfrew. “I was introduced to Ali and Brian [Meehan, Nude co-founder] … and I really, from the beginning, felt that we had a shared commitment. I felt that we were stronger as a team, together, than as individual companies.” Together the brands will be focusing on international expansion with the newly formed entity Counter Brands U.K.

DETAILS:
• Counter Brands, LLC, parent company of Beautycounter has acquired the worldwide assets of NUDE Skincare, Inc from LVMH.
• Ali Hewson will join the board of Counter Brands, LLC.
• As part of the transaction, Ali Hewson and her husband Bono will become investors in the company.
• Also joining as investors in Counter Brands are entrepreneur Bryan Meehan, who originally envisioned and created NUDE with Hewson, and global investor Paddy McKillen.
• Under Counter Brand’s leadership, the two brands will now grow the Beautycounter and NUDE skincare and cosmetics lines globally from U.S. headquarters outside of Los Angeles, and U.K. headquarters near London.
• The deal structure establishes Counter Brands U.K. to lead international expansion of the two brands.
• LVMH, which also own Edun the sustainable fashion branded founded by Hewson acquired NUDE in 2011.
• Beautycounter received a minority investment from private equity firm TPG Growth in 2014.
• Beautycounter is projected to reach revenue of $150 million for 2016 according to WWD.
• According to the New York Times, Beautycounter is predicting to do $225 million by 2017.
• NUDE will move their offices from San Francisco to Beautycounters offices in Santa Monica and Ms. Renfrew will become the CEO of both companies.
• Financial terms of the deal were not disclosed.

REVLON TO ACQUIRE ELIZABETH ARDEN

WHO: Revlon is a global beauty company that provides a range of cosmetics, hair color, hair care and hair treatments, beauty tools, men’s grooming products, antiperspirant deodorants, fragrances, skin care, and other beauty care products.

Elizabeth Arden is a global prestige beauty products company with an extensive portfolio of prestige beauty brands sold in over 120 countries.

WHY: This deal merges two highly complementary, iconic brand portfolios. Revlon will benefit from larger scale, an expanded global footprint, and sizable presence across distribution channels and product categories. Elizabeth Arden is strong in emerging markets, particularly China which will allow for the cross-sale of Revlon products.

DETAILS:
• Revlon and Elizabeth Arden have signed a definitive agreement for Revlon to acquire all of the outstanding shares of Elizabeth Arden for $14.00 per share in cash. This represents an enterprise value for Elizabeth Arden of approximately $870 million.
• BofA Merrill Lynch and Citigroup Global Markets Inc. have committed approximately $2.6 billion of financing to fund the acquisition and refinance Elizabeth Arden’s existing debt, as well as Revlon’s existing bank term loan and revolving credit facility. Revlon’s existing senior notes will remain outstanding.
• Scott Beattie is committed to executing on Elizabeth Arden’s business plans and it is expected that he will join Revlon’s Board of Directors as non-executive Vice Chairman. He will also serve as a senior advisor to Fabian Garcia, Revlon’s President and CEO, to ensure a successful integration and transition.
• Post-acquisition, the new combined entity of these two companies will have annual revenues of around $3 billion.
• This deal will allow the opportunity to refinance existing debt of Elizabeth Arden, while Revlon’s existing loan and available credit will be restructured, improving Revlon’s finances and financial operations.
• The merged company is also expected to benefit from cost savings of approximately $140 million.
• Moelis & Company served as lead financial advisor to Revlon.
• BofA Merrill Lynch and Citi also served as financial advisors to Revlon.
• Milbank, Tweed, Hadley & McCloy and Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to Revlon.
• Centerview Partners LLC served as financial advisor and Weil, Gotshal & Manges LLP served as legal counsel to Elizabeth Arden for the transaction.

ZEEL ACQUIRES MASSAGENOW

WHO: MassageNow, founded in 2014, partners with high-end spas to fulfill last-minute spa massage appointments.

Founded in December 2012 Zeel’s is a mobile app that provides on-demand massages from licensed therapists in 33 U.S. cities.

WHY: Zeel intends on growing its presence in New York and San Francisco through the acquisition of MassageNow from Locality. Zeel plans to transition MassageNow customers to its at-home service, instead of continuing to offer last-minute spa appointments, according to Zeel chief executive officer Samer Hamadeh. In addition to acquiring new customers, the deal also gives Zeel relationships with 50 spas in New York and San Francisco, which will be added to its Zeel Spa software offering. That service allows spas to book massage therapists to work at their locations.

DETAILS:
• Zeel is fresh off a $10 million Series A venture capital round led by Emil Capital Partners.
• Hamadeh declined to provide sales insights; he said that the app now boasts more than 6,000 registered massage therapists, and provided more than 200,000 massages from its launch in December 2012 to the end of 2015. This year, it expects to handle more than 200,000 massages.
• Terms of the acquisition were not disclosed.

NU SKIN $210 MILLION INVESTMENT

WHO: The 30 year old Provo, Utah-based business develops skin-care products under the Nu Skin and AgeLoc brands, plus antiaging supplements. The company also has supplements, hair-care, body-care, oral-care sun-care and cosmetics products. The brands are sold in more than 50 markets worldwide through a direct sales model.

Ping An of China Securities Hong Kong is owned by Ping An Insurance (Group) Company of China, one of China’s largest and leading integrated financial services groups with more than US$700 billion in total assets and over 200 million customers

ZQ Capital is an investment and advisory company with extensive relationships and local knowledge of China. ZQ Capital specializes in identifying, investing in, and working together with global companies to realize their growth potential in the Chinese market.

WHY: Greater China makes up the largest segment of the company’s sales, and brought in $158.7 million in the first quarter, Nu Skin reported. “Ping An and ZQ Capital bring significant local market knowledge and valuable expertise that we believe will positively impact our long-term growth opportunities in this important region,” said Nu Skin chief executive officer Truman Hunt in a statement. “We plan to use the proceeds for repurchasing common stock throughout the remainder of the year and investing in our China operations,” said Nu Skin chief financial officer Ritch Wood in a statement.

DETAILS:
• The investment is coming from Ping An ZQ China Growth Opportunity Ltd., a firm made up of investors led by Ping An of China Securities (Hong Kong) Co. Ltd., a financial services firm, and other investors affiliated with ZQ Capital Ltd, an investment group.
• Ping An ZQ is buying $210 million in 4.75 percent, four-year convertible senior notes with an initial conversion price of $46.50 per share.
• Simpson Thacher & Bartlett LLP provided legal advice to Nu Skin on the deal.
• Paul Hastings LLP advised Pin An ZQ, and MagStone Law LLP was ZQ’s legal adviser.

111 SKIN GETS FUNDING DEAL

WHO: Developed by plastic surgeon Dr. Yannis Alexandrides, MD, of 111 Harley Street London, 111SKIN was launched following years of research into developing a product to help the skin heal more efficiently after cosmetic surgery. During his research, Dr. Alexandrides discovered that skin ages faster in space and so collaborated with space scientists responsible for the wellbeing of astronauts. Together they developed the now-patented NAC Y² formula, the key ingredient of all products in the 111SKIN range. 111SKIN currently produces 26 products including repair serums, protective moisturizers, exfoliating cleansers, and toners, and is found in luxury distribution such as Harrods, Harvey Nichols, Space NK, Barney’s New York and Net-a-Porter.

RBS Invoice Finance is part of the Royal Bank of Scotland Group and is one of the largest providers of invoice finance in the UK. Their network of offices across the UK are able to offer customers a personal service that’s responsive to local needs.

WHY: To continue to expand domestically and in the international market. RBS Invoice Finance will provide financial support for the business to increase production and stock levels as demand continues to grow. The skincare brand is now focused on increasing product availability throughout these markets, increasing the geographical spread and number of stockists it supplies.

DETAILS:

• The company has just agreed to a funding deal with RBS Invoice Finance.
• Domestic annual turnover in the region of £2M.
• Julian Cassen, business development manager at RBS Invoice Finance, added: “111SKIN is a cutting edge brand and I am pleased that we have been able to support the company as it continues to expand. Having worked alongside Dr. Alexandrides to understand the business and its growth objectives, we have provided the company with an Invoice Discounting facility that will support working capital during this period of growth.”

UNILEVER BACKS BLOW LTD

WHO: blow LTD was cofounded by Fiona McIntosh (ex-Editor-in-Chief of Grazia and ELLE) and Dharmash Mistry in 2013. It has provided more than 700,000 services to consumers since its launch. The company sends beauty services, such as hairdressers and makeup artists, to customers’ doors in London’s Zones 1, 2 and 3. Customers are able to book and rate the professionals via a mobile app or online, while professionals self-manage their availability and accept jobs via the app. The firm has provided more than 70,000 services to date, registering over 90 percent customer satisfaction. blow also operates flagship beauty bars in Covent Garden and Canary Wharf, and sells a range of beauty products.

Seedrs is an equity crowdfunding platform.

Unilever Ventures is the venture capital and private equity arm of consumer goods giant Unilever, which invests in young, promising companies in the personal care and digital sectors. It looks to invest in outstanding management teams and innovative business models.

WHY: Funds from the campaign will go towards the delivery of the company’s product roadmap: recruiting, onboarding, quality control, and customer services process. blow will continue to test a range of organic and paid marketing channels while adding senior management talent and build operations. Stephen Willson, Investment Director at Unilever Ventures, said, “blow LTD is a leading player in Beauty Services on Demand in Europe, with a unique multi-channel model, comprehensive operational processes focused on quality of service delivery and innovative two-way marketplace technology. Dharmash and Fiona are reinventing the service experience and ultimately creating a new route for product distribution. We are excited to partner with them and provide access to Unilever’s assets, ecosystem and expertise.”

DETAILS:
• Unilever Ventures, the venture capital arm of Unilever, invested £500,000 into on-demand blow-dry services company blow LTD.
• blow LTD launched its Seedrs campaign in May. The total financial investment of the Unilever Ventures and Seedrs campaign equals more than £1M.
• More than 200 people have invested in the Seedrs campaign to date including Nick Robertson, founder and ex-CEO of ASOS.

REVLON ACQUIRES CUTEX INTERNATIONAL BUSINESS

WHO: For over 100 years, Cutex has provided consumers with quality and innovative nail products, including a wide range of nail polish remover products, including Cutex liquid nail polish removers, nail polish remover pads, jar nail polish removers, and gel polish removers.

Revlon is a global cosmetics, hair color, hair care and hair treatments, beauty tools, men’s grooming products, antiperspirant deodorants, fragrances, skincare, and other beauty care products company. The company’s vision is to establish Revlon as the quintessential and most innovative beauty company in the world by offering products that make consumers feel attractive and beautiful.

Coty is a leading global beauty company with net revenues of $4.4 billion for the fiscal year ended June 30, 2015. Founded in Paris in 1904, Coty is a pure play beauty company with a portfolio of well-known fragrances, color cosmetics and skin & body care products sold in over 130 countries and territories.

WHY: Commenting on the sale of the Cutex business, Patrice de Talhouët, Coty’s EVP and Chief Financial Officer, said: “As recently announced, Coty aims to rationalize its portfolio by focusing on fewer brands to drive a higher growth and better quality business, transforming Coty into a new global leader and challenger in the beauty industry. Coty’s sale of these Cutex businesses is another step towards our strategy. Coty will continue to drive its leadership in the consumer and salon nail category as a key part of its growth strategy, however the Cutex business was not a focus-brand for Coty.” By reunifying Cutex’s worldwide operations within Revlon’s brand portfolio, Revlon is now positioned to strengthen the Cutex brand by focusing on redesigning the existing Cutex nail care products to enhance consumer appeal and expanding its portfolio into additional categories.

DETAILS:
• Revlon acquired Coty’s international Cutex businesses, which primarily operates in Australia and the UK, completing the global consolidation of the Cutex brand’s worldwide operations under Revlon management.
• Terms of the acquisition were not disclosed.

SHISEIDO ACQUIRES LAURA MERCIER AND REVIVE

WHO: RéVive was founded by Harvard-trained plastic and reconstructive surgeon Dr. Gregory Brown, who believes women and men look their best when they have the glow of healthy, youthful skin. In 1997, he merged his three-dimensional understanding of the skin with Nobel Prize-winning science to create RéVive, one of the first skincare line created by a plastic surgeon.

Shiseido was founded in 1872 as the first Western-style pharmacy in Japan. The business is now known globally as the premier cosmetics company with roots in Japan. Shiseido’s global selection of skincare, makeup and fragrance includes a high-performance category for special skincare, and a brightening line. Shiseido also offers body care, suncare and a skincare line for men. Fiercely contemporary and innovative after over 140 years in business, Shiseido group brands are now sold in over 120 countries and regions.

Through its family of businesses, Alticor, Inc. connects entrepreneurs around the globe with unparalleled opportunity and consumers with premier products. It is the parent company of two distinct and dynamic businesses: Amway and Access Business Group LLC.

WHY: “We want to increase our footprint in prestige makeup,” Marc Rey, president and chief executive officer of Shiseido Americas explained, “which is obviously a very dynamic category in all the continents and particularly in the U.S. and in Asia. We feel the Laura Mercier brand will fit very well alongside the brands we have,” he said, referring to Nars, bareMinerals, Shiseido and Clé de Peau Beauté. He pointed out the acquisition was driven by Shiseido Americas. Masahiko Uotani, president and chief executive officer of the Tokyo-based parent, defined a vision he called Vision 2020 that gave much more power to the individual regions for specific product categories. “He is giving much more power to the regions. We are going to be able to leverage the Center of Excellence, Makeup and Digital and the new Innovation Center that we just opened in New Jersey,” Rey said.

DETAILS:
• Shiseido has signed a definitive agreement to buy Gurwitch Products, owner of the two beauty brands, from parent Alticor Inc.
• Shiseido declined to comment on the purchase price but the sale is estimated at $260M.
• Laura Mercier and ReVive had combined net sales of $175M in sales for 2015.
• Sales were not broken out, but it is estimated by industry sources that ReVive did $15 million of that total and Mercier generated $160 million, according to WWD.
• The deal is expected to close by the third quarter.
• Financo acted as financial adviser to Shiseido.
• Jones Day served as Shiseido Americas’ legal counsel.
• Moelis & Co. advised Alticor.
• Bryan Cave as legal counsel on the sale for Alticor.

JOHNSON & JOHNSON ACQUIRES VOGUE INTERNATIONAL

WHO: Vogue was founded in 1987 by Todd Christopher who brought a refreshing and innovative point of difference to the hair care industry. Vogue’s branded products include the award-winning OGX collection of shampoos, conditioners, and styling/treatment and body and bath items, Proganix salon-inspired hair care, and the recently launched Maui Moisture wholesome beauty line. Vogue’s products are distributed exclusively to the world’s largest retailers throughout the US and in 38 countries.

The Carlyle Group is a global alternative asset manager with $178 billion of assets under management across 125 funds and 164 fund-of-funds vehicles as of March 31, 2016. Carlyle’s purpose is to invest wisely and create value on behalf of its investors, many of which are public pensions. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Market Strategies and Investment Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,650 people in 36 offices across six continents.

Johnson & Johnson Consumer Inc., based in Skillman, NJ, is one of the world’s largest consumer health and personal care products companies. Its consumer companies produce many of the world’s most trusted brands, among them Johnson’s Baby, Band-Aid, Neutrogena, Tylenol, Motrin, and Listerine. Each one of their consumer businesses embraces innovative science to create products that anticipate consumer needs and create experiences that help them live healthy, vibrant lives.

WHY: “Our acquisition of Vogue International’s full line of leading advanced hair care products sold in the US and in 38 countries will strengthen our global presence in this important category,” said Jorge Mesquita, head of J&J’s consumer arm. “It will complement our consumer portfolio, while also presenting attractive hair care category growth opportunities.”

DETAILS:
• Johnson & Johnson will pay $3.3 billion in cash to acquire beauty products firm Vogue International.
• The current sale price is three times the $1 billion that Vogue reportedly sought in 2013 when it pursued a sale.
• According to CEW Beauty Insider, one investment banker estimated that Vogue has annual earnings before interest, taxes, depreciation and amortization of around $160 million.
• J&J is purchasing Vogue from the company’s founder, Todd Christopher, and private equity firm The Carlyle Group.
• Carlyle Group acquired a 49% stake in the hair care company in 2014.
• Its sales last year were more than $300 million and have been growing 25% annually, according to Wells Fargo Securities.
• The deal will include the OGX collection of shampoos, conditioners, treatments, styling products, body care and bath products, the FX line of hair styling products, and the Proganix and Maui Moisture hair care lines.
• The company said its OGX business grew more than 25 percent in 2015 and is on track to reap more than $400 million in gross sales this year.
• Retail sales across the OGX hair care brands totaled $77.3 million, a gain of 140.7 percent, for the 52-week period ended April 17, across US multi-outlet stores, according to IRI. The closing, which is subject to antitrust clearance and other customary closing conditions, is expected in the third quarter of 2016.
• Unilever, Henkel & Co K, L’Oréal and other companies had submitted first-round bids in an auction for Vogue, people familiar with the matter told Reuters.
• According to the WSJ, the deal for Vogue International LLC is J&J’s biggest in the $350 billion worldwide consumer-health market since the company was forced to recall iconic brands like children’s Tylenol and shut down a key manufacturing plant amid quality-control problems.
• Goldman Sachs – Financial advisor to Vogue
• Latham & Watkins – Legal advisor to Vogue and Carlyle
• King & Spalding – Legal advisor to Vogue and Todd Christopher
• Jones Day – Legal Advisor to Vogue

TA ASSOCIATES INVESTS IN PAULA’S CHOICE

WHO: Paula’s Choice, headquartered in Seattle and founded in 1995 by Paula Begoun, sells skin care and cosmetics products online. The company also has a forum called Beautypedia for reviewing products from other brands. Begoun, the author of The Original Beauty Bible and Don’t Go to the Cosmetics Counter Without Me, started the operation after years of researching and reviewing beauty products led her to develop her own line. The web site also features a section with advice on skin care, hair care and makeup, as well as information on product ingredients.

Bertram Capital is a private equity firm with over $850 million in committed capital, targeting investments in lower middle market companies. By supplying flexible investment capital and committing a wealth of operational and strategic resources to each investment, their core objective is to move companies, management teams, and employees toward unlocking their full potential.

TA Associates, headquartered in Boston, also backs Zadig & Voltaire and Full Sail University. The firm beat out the Hut Group, which made a roughly $250 million bid, according to sources.

WHY: TA Associates has invested in Paula’s Choice as part of a majority recapitalization in partnership with existing investor Bertram Capital.

DETAILS:
• Terms of the deal were not disclosed, but industry sources claim the transaction is valued at roughly $275 million, according to WWD.
• Bertram Capital and Founder Paula Begoun remain significant shareholders in the company.
• Paula’s Choice’s revenue hovers around $70 million in net sales.
• The company generates most of its sales from the site, and more than 90 percent of its web site traffic comes from unpaid, organic sources, according to a statement from Bertram.
• Bertram Capital first invested in the company in November 2012 and quickly deployed its value creation strategy, the Bertram High 5.
• Piper Jaffray and Financo advised on the deal.

PERMIRA INVESTS IN JOHN MASTERS ORGANICS

WHO: John Masters Organics provides natural alternatives for hair, face, and body. The company was established in 1991 by celebrity stylist John Masters with the creation of his first organic product, Dry Hair Nourishment and Defrizzer. Soon after he opened his first “clean-air salon” in Soho. Today it remains a luxury organic beauty brand committed to urban wellness that treats both customers and the planet with respect.

Permira is a global private equity firm founded in 1985, with a long and established track record of successfully partnering with premium lifestyle brands to create global leaders, including Hugo Boss, Valentino, and Dr Martens. They have expertise in global expansion and depth of understanding of premium and lifestyle brands as well as a wide global network. The firm advises funds with a total committed capital of approximately €25 billion (JPY 3 trillion) and makes long-term investments in companies with the objective of transforming their performance and driving sustainable growth. The Permira funds have made over 200 private equity investments in five key sectors: Consumer, Technology, Industrials, Healthcare and Financial Services. Permira employs over 200 people in 14 offices across Europe, North America, and Asia.

WHY: Permira is investing in the organic trend with the aim of the investment to continue the global expansion of the John Masters Organic brand. Founder John Masters stated, “I am delighted at this new partnership and thrilled by the prospect that working with Permira can help bring my vision of super natural beauty and organic, urban wellness to more people around the world who deserve to look and feel their best, knowing that the products they are using are composed of the best, most organic ingredients.”

DETAILS:
• The investment is valued at approximates $336M.
• Permira has a controlling stake in John Masters Organic, Inc as well as Styla Inc, the exclusive distributor of the brand in Japan and East Asia.
• Founder John Masters and Yoshimune and Maiko Noda, the founders of Styla, will continue to be involved in the running of the combined business.
• The brand is distributed in more then 40 countries.

PUIG ACQUIRES STAKE IN EB FLORALS

WHO: EB Florals was founded by world-famous floral designer Eric Buterbaugh and Fabrice Croise with the aim of creating an exclusive line of floral-based fragrances. Distribution is focused on the US market and the collection currently consists of eight unisex fragrances and six candles. The brand is currently sold online and in the brand’s Hollywood boutique with expansion plans in limited Saks doors and Bergdorf Goodman in New York.

Puig is a third-generation family-owned fashion and fragrance business based in Barcelona. The strength of Puig lies in its ability to build brands, to shape the image of brands through fashion, and to translate that same image into the world of fragrance through storytelling and product excellence. The Puig success stories include a combination of owned brands such as Carolina Herrera, Nina Ricci, Paco Rabanne, Jean Paul Gaultier, Penhaligon’s and L’Artisan Perfumeur; listens such as Prada, Valentino and Comme des Garçons, and celebrity fragrances.

WHY: Puig has a proven track record in identifying up-and-coming fragrance brands and helping to accelerate their business development leveraging their existing distribution infrastructure. According to Cosmetic Design, “the move represents a step towards expanding Puig’s US footprint, which it has been attempting to rebuild since it lost its partnership with Coty back in 2013, following a six year partnership.” This agreement is also in line with the Puig strategy to focus on the selective perfumery market in order to achieve its business goal of capturing a 12 percent global market share by 2020.

DETAILS:
• Puig has become a minority shareholder with the objective to support the growth of EB Florals through brand building and deployment.
• The agreement is structured to accommodate the growth of the company’s investment over the next several years.
• Puig, which closed 2015 with revenues of 1,645 million euros, sells its products in more than 150 countries

JOHNSON & JOHNSON TO ACQUIRE NEOSTRATA

WHO: NeoStrata, based in Princeton, NJ, has a history of innovation that includes breakthrough research in Alpha hydroxy acids, which have become a standard among anti-aging technologies in the beauty category. The company develops and markets a range of clinically proven, dermatologist-developed skin care products that meet the needs of every skin type.

Johnson & Johnson Consumer Inc., based in Skillman, NJ, is one of the world’s largest consumer health and personal care products companies. Its consumer companies produce many of the world’s most trusted brands, among them Johnson’s Baby, Band-Aid, Neutrogena, Tyleonol, Motrin, and Listerine. Each one of their consumer businesses embraces innovative science to create products that anticipate consumer needs and create experiences that help them live healthy, vibrant lives.

WHY: “Drs. Ruey Yu and Eugene Van Scott formed NeoStrata in 1988 and continue to make significant contributions to the science of skincare. NeoStrata’s legacy in dermocosmetics will complement our global Consumer portfolio and enable us to deliver advanced skin care brands to consumers around the world,” said Jorge Mesquita, Worldwide Chairman, Consumer, Johnson & Johnson. “NeoStrata and Johnson & Johnson share a strong history of innovation and together we will work to discover important new skin care solutions grounded in deep human insights and compelling science. We look forward to working closely with NeoStrata’s distributors around the world and having their outstanding team of employees join Johnson & Johnson Consumer later this year.”

DETAILS:
• Financial terms were not disclosed.
• The acquisition is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions and expected to close in the first half of 2016.

CLAYTON, DUBILIER & RICE TO BUY HIGH RIDGE BRANDS

WHO: High Ridge Brands, headquartered in Stamford, CT, US, employs roughly 45 employees. It was initially created in 2010 in order to buy the Zest skin cleansing brand from P&G and to act as a platform for future takeovers in personal care. High Ridge Brands consists of a portfolio of beauty and personal care brands including: Zest, Alberto VO5, Rave, Coast, White Rain, Continental Fragrances and several smaller personal care brands.

Brynwood Partners, founded in 1984 and based in Greenwich, CT, is an operationally focused private equity firm that makes control investments in North American-based lower middle-market companies in the consumer sector. Brynwood Partners currently manages over $725 million of private equity capital for its limited partners, which include US and international pension funds, fund-of-funds, endowments, high-net-worth family investment offices and financial institutions.

WHY: Henk Hartong III, President and CEO of Brynwood Partners, said: “We are delighted to announce the sale of High Ridge Brands, the largest realization in Brynwood Partners’ 32-year history, to Clayton, Dubilier & Rice. Clayton, Dubilier & Rice is a well-respected private investment firm with the leadership, capital and vision to take the company to the next level.”

DETAILS:
• Private equity firm Clayton, Dubilier & Rice is set to acquire High Ridge Brands from Brynwood Partners VI for $415m.
• The transaction is slated to be finalized in the second quarter of this year and is subject to regulatory approval.
• William Blair & Company, LLC served as the company’s investment banking advisor.
• Holland & Knight LLP acted as legal advisor.
• Debevoise & Plimpton LLP acted as legal advisor and BMO Capital Markets acted as financial advisor to Clayton, Dubilier & Rice.

L’OREAL INVESTS IN FOUNDERS FACTORY

WHO: Founders Factory is a new model in business creation that is corporate backed, with genuine ambition and breadth. It couples execution-level support from a dedicated operating team with access to the best investors, audience owners and thought leaders in technology. Founders Factory will build and scale over 200 early-stage technology companies across six sectors over the next five years. Committed to being at the heart of the growing European tech ecosystem, Founders Factory launched its first sector, Education, in June 2015 with investment from Holtzbrinck Publishing Group (whose subsidiaries include Macmillan Publishers) and its second sector, Media, with backing from Guardian Media Group (GMG) in January 2016. Founders Factory is born out of Founders Forum, the leading global network of the most successful entrepreneurs and technology business leaders.

L’Oréal has devoted itself to beauty for over 105 years. With its unique international portfolio of 32 diverse and complementary brands, the Group generated sales amounting to 25.26 billion euros in 2015 and employs 82,900 people worldwide. As the world’s leading beauty company, L’Oréal is present across all distribution networks: mass market, department stores, pharmacies and drugstores, hair salons, travel retail, branded retail and e-commerce. Research and innovation, and a dedicated research team of 3,870 people, are at the core of L’Oréal’s strategy, working to meet beauty aspirations all over the world.

WHY: The investment makes L’Oréal Founders Factory’s exclusive partner for investments in beauty tech startups worldwide, fulfilling part of L’Oréal CEO Jean-Paul Agon’s vision of the transformative power of digital for the beauty category. “At Founders Factory we provide ambitious forward-thinking blue-chip companies with a way to develop innovative technology startups away from their day-to-day business and connect them with elite entrepreneurial talent from across the globe,” said Founders Factory cofounder Brent Hoberman, in the press release. “Marrying our expertise in digital with L’Oréal’s brands, scientific research, and audience reach offers a compelling opportunity to build and scale the next generation of beauty startups.”

DETAILS:
• L’Oréal becomes Founders Factory’s exclusive partner for investments in beauty tech startups worldwide.
• L’Oréal and Founders Factory will invest and scale five early-stage startups and co-create two new companies from scratch every year.
• L’Oréal will be represented on the Founders Factory board by Rochet and three L’Oréal executives, who will also hold seats on the beauty sector committee of Founders Factory.

ELIZABETH ARDEN ACQUIRES CHRISTINA AGUILERA FRAGRANCE FROM P&G

WHO: Christina Aguilera introduced her first fragrance in 2007, and has since grown to seven brands. In addition to being the No. 1 celebrity fragrance brand in Europe, it stands as the most awarded celebrity fragrance brand in this region.

Elizabeth Arden is a global prestige beauty products company with an extensive portfolio of prestige beauty brands sold in over 120 countries. The company’s brand portfolio includes Elizabeth Arden skin care, color and fragrance products; its professional skin care line, Elizabeth Arden PRO; the designer fragrance brands of Juicy Couture, John Varvatos, and Wildfox Couture; the heritage fragrance brands of Britney Spears, White Diamonds Elizabeth Taylor, Curve, Giorgio Beverly Hills, Ed Hardy, Jennifer Aniston, Lucky Brand, Paul Sebastian, Halston, Geoffrey Beene, Rocawear, Alfred Sung, White Shoulders, and BCBGMAXAZRIA; and the celebrity fragrance brands of Taylor Swift, Nicki Minaj, Mariah Carey, and Justin Bieber.

WHY: George Cleary, president, Global Fragrances, Elizabeth Arden said, “We are tremendously excited with our agreement to acquire the Christina Aguilera fragrance license. This stellar brand is one with a global footprint and a significant international presence in Europe. This acquisition is consistent with our strategy to acquire brands to grow our fragrance business on a global basis, and we look forward to working with Christina to advance the success of this luxury, longstanding fragrance brand.” Aguilera will be joining a team that includes Britney Spears, Taylor Swift, Nicki Minaj, Mariah Carey, and Justin Bieber, since these are a few of the brands in Elizabeth Arden’s portfolio.

DETAILS:
• Elizabeth Arden, Inc. has signed an agreement to acquire the global license and certain related assets for the Christina Aguilera fragrance business from Procter & Gamble International.
• Terms of the transaction were not disclosed.
• The transaction is expected to close in the first quarter of fiscal 2017 and is subject to customary regulatory approvals.

MALAYSIA’S BEAUPASS ACQUIRES SINGAPORE’S WELLNESSLY

WHO: Singaporean startup Wellnessly was founded in 2014 as an online beauty and health marketplace.

Beaupass, established in August 2015, has grown rapidly into the leading premier beauty platform in Southeast Asia and has plans for further expansion into Southeast Asia. Target markets include Hong Kong, Taiwan, Bangkok, and Jakarta.

WHY: The acquisition of SuzieBeauty diversifies FTG’s products and positions the group as a key player in the niche color cosmetics prestige segment. Flame Tree Group has been realigning and refocusing its product portfolio for its cosmetics category for both skin care and hair care. It recently acquired four brands from Beauty Plus Trading East Africa as it seeks to tap into the growing popularity of local cosmetics care brands within the mass market.

DETAILS:
• Singapore-based beauty services marketplace Wellnessly has been acquired by Malaysia’s Beaupass.
• Wellnessly had over 3,500 listings at the time of the deal and had about 30,000 unique monthly visitors and was growing at 15 percent.
• The terms of the deal were not disclosed.

ALLERGAN ACQUIRES TOPOKINE THERAPEUTICS

WHO: Topokine is a clinical-stage biotechnology company developing topical prescription medications that act pharmacologically on adipocytes to contour the face and body. The company’s lead program, XAF5, is in late-stage clinical development for reduction of undereye bags (steatoblepharon). The company’s assets are protected by more than 75 issued and pending patents worldwide.

Allergan plc (NYSE: AGN), headquartered in Dublin, Ireland, is a unique, global pharmaceutical company and a leader in a new industry model – Growth Pharma. Allergan is focused on developing, manufacturing and commercializing innovative branded pharmaceuticals, high-quality generic and over-the-counter medicines, and biologic products for patients around the world. Allergan markets a portfolio of best-in-class products that provide valuable treatments for the central nervous system, eye care, medical aesthetics, gastroenterology, women’s health, urology, cardiovascular and anti-infective therapeutic categories, and operates the world’s third-largest global generics business, providing patients around the globe with increased access to affordable, high-quality medicines. Allergan is an industry leader in research and development, with one of the broadest development pipelines in the pharmaceutical industry and a leading position in the submission of generic product applications globally.

WHY: Through the acquisition Allergan buys the global rights to XAF5, a topical product currently being developed to treat undereye bags or steatoblepharon. Undereye bags are estimated to affect 40 million people in the US. David Nicholson, Executive Vice President and President, Global Brands Research & Development at Allergan, said: “The acquisition of Topokine and its XAF5 technology adds an innovative technology to Allergan’s industry leading mid-to-late stage pipeline of more than 70 programs and bolsters our leadership in medical aesthetics. XAF5 has the potential to be the first topical fat reduction product for the treatment of steatoblepharon, a condition with no current therapeutic options available for patients.”

DETAILS:
• Under the terms of the agreement, Allergan acquired Topokine Therapeutics for an upfront payment of $85 million and success-based development and sales milestones.
• Leerink Partners LLC acted as financial advisor to Topokine.
• Covington & Burling LLP acted as legal advisor to Allergan and Foley Hoag LLP acted as legal counsel to Topokine.

YOOX NET-A-PORTER GROUP SELLS €100 MILLION STAKE TO ALABBAR

WHO: Yoox Net-a-Porter was created a year ago in an all-stock merger of the Milan-based Yoox, founded by Federico Marchetti, and Net-a-Porter, owned by Swiss group Richemont.

Mohamed Alabbar owns a number of malls and retail businesses in Dubai, including The Dubai Mall — the world’s biggest and most-visited mall, which alone accounts for 50 percent of all of Dubai’s luxury goods spend.

WHY: Through the investment, Yoox Net-A-Porter Group plans to pursue new growth opportunities through localization in key high-potential regions, invest in the development of a common omnichannel-enabled techno-logistics platform across all regions and stores, and retain maximum balance sheet flexibility. Yoox Net-a-Porter’s decision to partner with Alabbar was strategic: In addition to funds, he provides expertise in the Middle Eastern market, an important one for luxury businesses despite the fact that growth of the market there has recently begun to slow.

DETAILS:
• Yoox Net-A-Porter has sold a 4 percent stake to Middle Eastern retail giant Alabbar Enterprises in exchange for €100 million (about $113 million) in capital.
• The increase will be executed through the issuance of 3,571,428 ordinary shares at a price of €28 per share.

REGENT HOLDINGS ACQUIRE ILLUME

WHO: Headquartered in Bloomington, MN, Illume is a leading, vertically integrated designer, manufacturer, and marketer of high-quality branded and private-label home fragrance and personal care products. Products can be found in over 7,000 doors nationwide and through the company’s online retail store. Retail customers include Anthropologie, West Elm, and Target. Internationally, Ilume can be found in 44 countries, including England, Japan, and the United Arab Emirates.

Regent Holding Company is a wholesaler of home décor and other products sold primarily under trade brands Creative Co-Op in the US and Bloomingville in Europe. Between the two companies, Regent has multiple distribution channels in the United States, Europe, the Middle East, and Asia, and supplies more than 30,000 retail doors globally. In addition, through its sourcing company, York Asia, Regent is able to leverage its scale to maximize supply chain efficiencies. With its portfolio of complementary products, distribution centers on three separate continents, and significant sourcing infrastructure, Regent is able to maximize the potential of great products and designs – reaching consumers throughout the world.

WHY: Eugene Wang, CEO of Regent Holding Company, said: “We are thrilled to be partnering with Illume. Illume’s unique combination of design expertise along with top-notch manufacturing capabilities aligns perfectly with Regent’s strategic objective of maximizing product selling opportunity through leveraging great design with broad sales distribution and efficient sourcing. We look forward to working with the talented Illume management team to capitalize on significant cross-selling opportunities to help Illume continue on its impressive growth trajectory.” Under its new ownership, Illume will benefit from Regent Holding’s multiple distribution channel in the US, Europe, the Middle East, and Asia. Regent Holdings supplies more than 30,000 doors globally.

DETAILS:

• NXT Capital provided financing for Regent Holding Company‘s acquisition of Illume. The additional funding came through an amendment and expansion of Regent’s existing senior secured credit facility, provided by NXT when Regent was recapitalized by private equity firm Freeman Spogli & Co in October 2015.
• Liz Barrere will continue in her role as president and CEO.
• Illume top leadership and employee force will remain with the company.
• Illume’s factory in Bloomington, Minnesota, will also continue to produce products for the combined company.

P&G SELLS ONDAL SARL PRODUCTION SITE

WHO: Ondal Sarl manufacturers many of the more than 40 beauty brands P&G agreed in July 2015 to sell to Coty Inc.

Mibelle produces own-brand products across the personal care, home care and nutrition industries. It currently employs around 1,000 people and has an annual turnover of €432M.

WHY: The sale follows last year’s deal between P&G and Coty, which will see more than 40 beauty brands transfer to Coty later in 2016. Many of the sold brands are said to be manufactured by Mibelle Group. The deal will add new technologies to Mibelle’s existing offering and is said to fit with Mibelle’s strategic direction and planned international expansion.

DETAILS:
• P&G is selling its Ondal Sarl production site in Sarreguemines, France, to Swiss manufacturer Mibelle Group.
• As of July 31, 2016, Mibelle will take over ownership of the Ondal Sarl site, manufacturing hair care, skin care, and body care products for P&G and later Coty after the transfer deal completes.
• All 180 P&G employees currently at the site are expected to be kept on and new staff are expected to be hired in Mibelle’s Switzerland headquarters as part of the deal.
• Financial terms of the deal were not disclosed.

RUSSIAN PHARMA BUSINESS SELLS TO BEAUTY RETAILER 36.6

WHO: 36.6 (listed on the Moscow Exchange, ticker APTK) is a leading health and beauty retailer with around 1,000 stores in Moscow and the Moscow region. It employs around 4,800 people.

Walgreens Boots Alliance (Nasdaq: WBA) is the first global pharmacy-led, health and well-being enterprise. The company was created through the combination of Walgreens and Alliance Boots in December 2014. Walgreens Boots Alliance is the largest retail pharmacy, health, and daily living destination in the USA and Europe and, together with its equity method investments, employs more than 370,000 people and has a presence in more than 25 countries. Walgreens Boots Alliance is a global leader in pharmacy-led, health, and well-being retail with over 13,100 stores in 11 countries. The company includes one of the largest global pharmaceutical wholesale and distribution networks with over 350 distribution centers delivering to more than 200,000 pharmacies, doctors, health centers, and hospitals each year in 19 countries. In addition, Walgreens Boots Alliance is one of the world’s largest purchasers of prescription drugs and many other health and well-being products. The company’s portfolio of retail and business brands includes Walgreens, Duane Reade, Boots, and Alliance Healthcare, as well as increasingly global health and beauty product brands, such as No7, Botanics, Liz Earle, and Soap & Glory.

WHY: Vladimir Kintsurashvili, director general of 36.6, said the deal meant the Russian company had access to the experience and expertise of one of the leading international companies. He added that it would help improve management of all areas of the business at 36.6.

DETAILS:
• Walgreens Boots Alliance, Inc. sold its local pharmaceutical wholesale business, Alliance Healthcare Russia, to leading Russian health and beauty retailer 36.6.
• Following completion, Walgreens Boots Alliance will own a 15% stake in the 36.6 group.
• Baker & McKenzie advised Walgreens Boots Alliance.

PDC BRANDS ACQUIRES UK-BASED ORIGINAL

WHO: Original Additions, founded in London on the Kings Road in Chelsea, offers three market-leading beauty brands: Eylure (false eyelashes), Elegant Touch (nailcare) and Salon System (professional beauty products). It has a distribution network spanning 40 countries, most of the major drug, beauty and fashion chains, and more than 40,000 retail customers worldwide.

PDC Brands was founded in the early eighties and has emerged as a leader in the beauty, personal care and wellness space with a focus on mass-market retail. In 2012, the company joined forces with Boston based private-equity firm Yellow Wood Partners. PDC BRANDS portfolio of products can be found at major mass, chain drug, grocery, and specialty retailers throughout the USA, UK, and in 50 markets globally.

WHY: According to PDC, Eylure London, Elegant Touch and Salon System fit perfectly into its global portfolio of brands which includes the No. 1 US adult bath care brand Dr Teal’s, the No. 1 men’s and No. 1 women’s mass market fine fragrance brands Body Fantasies and BOD Man, top Specialty Bath brands Bodycology and Calgon, and the fastest-growing multicultural hair care brand in the US, Cantu. “This is an important strategic milestone for the company and the first step in PDC’s long-term goal of becoming a major player in European Cosmetics and Beauty,” states Tad Yanagi, Partner at private equity firm Yellow Wood Partners and PDC Board Director.

DETAILS:
• According to WWD industry sources estimate Original Additions has sales exceeding $75 million.
• PDC will retain Original Additions staff including Simon Zussman, Original Additions managing director.
• Since partnering with Boston-based private equity firm Yellow Wood Partners in 2012, PDC Brands has acquired eight category-leading consumer brands and continues to be on the lookout for more.
• Deloitte, the business advisory firm, has acted as lead corporate finance adviser on the sale of Original Additions.

AHAVA ACQUIRED BY FOSUN GROUP

WHO: Ziva Gilad, a spa technician, came up with the idea of marketing Dead Sea mud after watching women tourists scooping up the mud to take home. Ahava was founded in 1988 as a single stand selling bottles of body scrub to tourists, generating $1 million that year. Since then Ahava has grown to become the definitive Dead Sea mineral beauty expert. The company is based in Holon, Israel.

Fosun International Limited engages in pharmaceutical and healthcare, property development, iron and steel products, mining, asset management, and insurance businesses primarily in Mainland China and Hong Kong. The company was founded in 1992 and is based in Shanghai, China. Fosun International Limited operates as a subsidiary of Fosun Holdings Limited.

WHY: Liang Xinjun, Vice Chairman and CEO at Fosun Group, said: “We feel very confident about the market in Israel and continue to seek suitable investment opportunities in different areas in the country. We are glad to have succeeded in acquiring such a famous, strong and successful brand as Ahava under this mutually beneficial agreement. We will endeavor to extend the success of this brand to China and other countries.”

DETAILS:
• Ahava will be fully acquired by Chinese investment group Fosun for $77 million.
• As of 2015, Ahava was controlled by Gaon Holdings, the Livnat family, and Shamrock Holdings, who together owned 53% of the company; Kibbutz Mitzpeh Shalem held 35%, Kibbutz Kalia 5.8%, and a group of local kibbutzim another 6.7%.

EVONIK ACQUIRES FRENCH BIOTECH COMPANY

WHO: Alkion Biopharma SAS is one of the leading manufacturers of biotechnologically developed cosmetic active ingredients. The company has developed methods for cultivating plant biomass under laboratory conditions and obtaining extracts from this with an exceptionally high yield of complex ingredients. The entire process takes place without altering the plant genome. “We are simply reinforcing the strength of nature. This results in unique, innovative cosmetic actives,” said Dr. Franck Michoux, founder and CEO of Alkion.

Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals, operating in the Nutrition & Care, Resource Efficiency and Performance Materials segments. The company benefits from its innovative prowess and integrated technology platforms. In 2015 more than 33,500 employees generated sales of around €13.5 billion and an operating profit (adjusted EBITDA) of about €2.47 billion.

WHY: Evonik is purchasing this company to expand the portfolio of the Personal Care Business Line in the area of active ingredients. By taking over the French biotech company, Evonik is strengthening its portfolio of specialty active ingredients.

DETAILS:
• Evonik Industries concluded a purchase agreement to take over the startup Alkion Biopharma SAS, headquartered in Evry (France).
• The purchase price has not been disclosed.

FEELUNIQUE RECEIVES $28.4 MILLION CASH INJECTION

WHO: Feelunique was founded by Aaron Chatterley and Richard Schiessl in 2005 and is the largest pure-play online retailer of premium beauty products in the UK. The firm ships almost 12,000 items a day to more than 100 countries. It stocks 22,000 products, including YSL, Chanel, Dior, Tom Ford and Laura Mercier.

WHY: Joel Palix, CEO of Feelunique, said: “We are delighted that Palamon have increased their financial commitment alongside two new co-investors at this very exciting time for the business. Our financial results show the strength of the brand in the UK and with strong consumer demand for our unrivalled brand portfolio coming from all corners of the world, it is clear that the business has expansive growth potential. We look to the future with confidence as Feelunique leads with its universal and diverse approach to beauty – one without boundaries.” The company is expanding its global reach as well, with its website now available in five languages: English, French, Spanish, German, and Chinese. Its website now receives on average 120,000 visits per day.

DETAILS:
• Beauty retailer Feelunique has received a new investment from existing shareholder Palamon Capital Partners and two new co-investors. Palamon committed 5 million pounds to Feelunique.com alongside two co-investors for a total $20 million pound infusion of capital.
• In the UK, Feelunique saw revenue shoot up 38% with total retail sales for the year ended 31 March 2016, up 23% year-on-year to £65M.
• At the end of last year, the company acquired Parfumeries Rive Droite, a French perfumery chain with four bricks-and-mortar doors. The acquisition represented the first time a UK beauty retailer expanded into France through an acquisition of an established beauty retail chain.
• Palamon acquired the Company in December 2012 recognizing the growth opportunity presented by the significantly underpenetrated online beauty retail sector.
• The full terms of the transaction were not disclosed.

BEAUTYKIND ANNOUNCES IPO

WHO: Launched In November 2014, BeautyKind is an online beauty retailer with charitable giving at its core. Customers can shop their favorite beauty, hair, fragrance and skin care brands, while directing 5% of every purchase to causes of their choice, whether that is a local cause or a national organization. The BeautyKind Ambassador Program provides additional incentives to individual customers by rewarding them and their referrals for purchasing BeautyKind products while benefiting the charities of their choice. To learn more, please visit BeautyKind.

WHY: “The core belief behind BeautyKind is to give back to causes and its customers, and our Regulation A+ public offering reinforces this notion,” said Founder and CEO, Hil Davis. “We’re proud to provide all members of our community with the opportunity to invest early in the lifecycle of our company, and to help shape its growth.” Funds raised will help drive new ventures for BeautyKind, significantly increasing its marketing and adverting spends, investing in technology, and building out the management team.

DETAILS:
• BeautyKind LLC was approved by the Securities and Exchange Commission to raise $10M through a Regulation A+ initial pubic offering.
• Net proceeds from the offering are expected to reach $9.3M according to WWD.
• The offering will be conducted on a best-efforts basis by WR Hambrecht + Co as the sole underwriter.
• The company has suffered an aggregate net loss of $4.4 million since its inception in August 2014. For the six months ending July 31, 2015, BeautyKind had revenues of $517,713 and the cost of the revenue was $722,657. For the fiscal year ending Jan. 31, 2015 the company had revenues of $28,053 and the cost of the revenue was $39,923.
• Everett Pierce Marshall Jr. is a director of the company and has loaned the business $2 million.
• CoFounder and CEO John Hilburn Davis said he expects BeautyKind to break even a year from now as he projects sales of $2 million a month. “The company is on track to do $6 million to $7 million in net revenues this year,” said Davis.

ADDITIONAL TRANSACTIONS

Althea, a Korean company that launched last year has secured a reported $3.5 million in funding to further expansion. The company differentiates itself from other cross-boarder K-beauty retailers by focusing its reach on Southeast Asia while rivals target markets in the West.

Swallowfield, a UK cosmetics and personal care supplier and the creator of Bagsy, has confirmed the ball is in motion to acquire Brand Architekts, pending shareholder approval. Brand Architekts owns a portfolio of massage beauty brands, many of which already use Swallowfield’s services. Key brands in the portfolio due to transfer to Swallowfield, if the acquisition is approved, include: Dirty Works, Kind Natured, Argan, Happy Naturals, DrSalts, Superfacialist, and Senspa. Brand Architekts generated net sales of £10.7M in the year to January 2016.

Lola Make Up by Persé, a UK color cosmetics brand, has been acquired by Amalgamated Euro Products Limited (AEPC UK). The brand will now join AEPC UK’s growing portfolio of beauty brands including Cinere, Reseed, and Figurite, which specialize in hair and skin care.

• Ametek, Inc. announced the completion of two acquisitions; Brookfield Engineering Laboratories and ESP/SurgeX. These businesses will allow AMETEK to expand its presence in laboratory instrumentation and power protection, two attractive growth platforms. Following the acquisitions, Brookfield Engineering has officially changed its name to Brookfield AMETEK.

• Emerald Performance Materials and DyStar have reached an agreement for DyStar to buy the Emerald Specialties and Polymer Additives and Nitriles business groups, involving five of the nine company plants. The sale is expected to close in the third quarter 2016, subject to approvals. Details have not been disclosed.

• Phoenix Color Corp. is acquiring beauty packaging business Color Optics from Arcade Beauty for $7 million. Marc Reisch, Phoenix chairman Said “Phoenix Color will be investing approximately $5 million in new press, finishing and folding equipment including a 10-unit, perfecting press with coater that will support Color Optics and also provide additional capacity and capabilities for our high-quality, multicolor book customers.” In connection with the acquisition, Phoenix Color said it anticipates adding $10 million to its financing agreement with Cerberus Business Finance LLC.

ABOUT BGM:

One part creative genius, one part data geek and digital Sherpa, one part management consultants and an army of executors. BGM live in the space between the world of fast moving, lean startups and that of traditionally, established corporations and by combining their background in creative and analytical they solve the business gap that currently challenges the vast majority of brands today. Forward thinking and nimble, BGM connects brands with consumers no matter what the means or medium. BGM combine strategy, branding, design and technology to drive revenue.