M&A 2015 Overview

INTRODUCTIONM&A activity in 2015 was robust in the personal care and beauty sector. Dominated by large multinationals and conglomerates,
2015 was a strong year of strategic growth by acquisition to expand product portfolios, strengthen market positions, and
broaden and deepen distribution channels. The ground breaking $12.5 billion dollar deal between P&G and COTY is one that
will go down in the record books, and strategic players on the supply side grew by acquisition in a modestly growing market.
The interest in niche and luxury brands and beauty tech are trends that continued in 2015 driven by the potential of fast and
substantial value creation, and in new segments, too.
Looking to 2016, mobile commerce, beauty tech and direct-to-consumer companies are three areas we believe will continue
to be of interest to investors seeking strong returns through scale.
At, BGM we believe that we’ve struck a right brain left brain balance when it comes to approaching the business of beauty. Our
view is that one informs the other, and both are critical for success; with principals Kelly Kovack and Scott Gurfein creating the
perfect union through left-brain, logic, reasoning and management, and right-brain strategy, innovation and creativity.
Dive into our second edition M&A round up for 2015.

WHAT:Founded by CEO Kathleen Jennings, BeautyNow is a mobile
app that networks spas and salons using different scheduling
software and connects them with consumers through a
single platform. BeautyNow began beta testing last May and
went live in November. Currently, there are 10,000 consumers
using the national platform with the most active markets
being Houston, New York, San Francisco and Los Angeles.
WHY:“The thing that excited me the most, knowing a little bit
about the salon business, is that a lot of the time the salon is
booked and then doesn’t get the business. The [consumer]
needs to find somewhere else to go and will make a lot of
phone calls to find another place or call up her network of
friends for recommendations.…This app lets you know where
to go and when to go to get whatever services you want.
It adds more business to the salon industry. It also fits the
lifestyle of people today. It’s about instant gratification,”
DeJoria said about why he decided to invest in BeautyNow.
Jennings said the funding will be used to enhance the
technology to integrate more than 40,000 new salons to the
platform. The existing platform currently has 5,000 firms that
use the scheduling system.
DETAILS:• $500,000 seed investment from Paul Mitchell cofounder
John Paul DeJoria.
• DeJoria’s investment is the first seed funding for the
company, which to date had been self-funded by
Jennings.
• DeJoria said that his company Paul Mitchell will also be
making a separate “financial contribution.”
• Details of the framework for the partnership are still
being worked out.
• DeJoria will take a hands-on advisory role at the company.
KK:
Like Glamsquad, BeautyNow
uses a model similar to Open
Table for restaurants. DeJoria
brings more than capital into the
mix. The fact that the Paul Mitchell
brand has distribution in 5000 salons
and DeJoria intends to take a hands-on
advisory role could give this app a
competitive edge over the others in
the category.
SG:
Leverage in this deal is what’s exciting with DeJoria’s
involvement which will undoubtedly move the
needle on salon acquisition, which will make the app
far more compelling to consumers. This is yet another
perfect example of how technology enabled businesses
can change the game for an industry and given the size of
the professional services market, this business has the
potential to be enormous.
PAUL MITCHELL
CO-FOUNDER SEED
INVESTMENT IN
BEAUTYNOW

UNILEVER BUYS
SOAP BRANDS FROM
PROCTER GAMBLE
WHAT:Camay was introduced by PG in 1926 as a mild soap made
for women. Now sold in more than 60 countries, “Camay is
one of PG’s most global brands,” according to Procter
Gamble. “Over the years, the brand has built significant
awareness, activity, equity, consumer value and shares.”
Zest Beauty Bar Soap was introduced by PG in 1952 as
a “deodorant bar” that included both standard soap and
synthetic detergent ingredients. The synthetic detergent
prevented the deposition of soap scum in the presence of
hard water.
WHY:PG has agreed to sell some of its soap brands to Unilever.
This latest move by the consumer-products giant is consistent
with its strategy of streamlining the company. The company
added that the brands would benefit from Unilever’s
“innovation and RD capabilities.” Alan Jope, president
of Unilever’s personal care unit commented that the
acquisition of the soap manufacturing facility in Mexico, “They
will make us one of the market leaders in skin cleansing in
Mexico, a priority market for Unilever.”
DETAILS:• The deal includes the global sale of the Camay brand
and the sale of the Zest brand outside of North America
and the Caribbean.
• The company will also sell its Talisman facility in Mexico
to Unilever. The facility has 170 employees.
• Terms of the deal, which is expected to close in the first
half of next year, were not disclosed.
• Unilever said the brands generated about $225 million
in revenue in the latest fiscal year, just 4% of the Skin
Care and Makeup segment revenues.
KK:
This deal is in line with the strategic focus of both firms and
the first of what may be many transactions and a long
road of PG’s very public consolidation strategy. Unilever
announced its intention to focus on its personal care
business after reducing its food portfolio. Zest and Camay fit
nicely in the current Unilever soap portfolio that consists of
Lifebouy, Dove, Caress, Lever 2000 and Lux.
SG:
A win-win for both parties. The transfer of healthy assets to
Unilever whose core competency is well suited to own Zest
and Camay makes sense and should contribute positively to
top and bottom line sales.

GWYNETH PALTROW
AND GOOP HAVE
JOINED FORCES WITH
JUICE BEAUTY
WHAT:Launched in 2005 by founder Karen Behnke, who partnered
with a group of scientists to develop products that used
100 percent natural juice as their foundation. Juice Beauty
is a line that prides itself on high-efficacy, certified
organic solutions that meet some of the country’s most
stringent organic standards. The company is known for
having products that get serious results without using
any chemicals or fillers. The distribution consists of 1,200
retail doors including Ulta, Rancho La Puerta, Whole Foods,
Pharmaca, and over 20 countries.
WHY:The two California-based entrepreneurial companies bonded
over their love for eco-chic living with a true dedication to
sustainability that gave rise to this partnership arrangement.
“Gwyneth is the ultimate strategic business partner and she
will enhance what Juice Beauty stands for – creating
authentically organic formulations that perform as well or
better than conventional chemically laden products”. “It
was really important to me to not just hire a face or do
an endorsement type of deal,” said Behnke. “It was more
important for me to align goals and values and find a true
business partner.” From Paltrow’s point of view, “I wanted to
move away from the celebrity endorsement aspect,” noted
Paltrow, who recently invested in Blo Blow Dry Bar. “I’m
very appreciative of all the endorsements I’ve gotten in the
past and there’s always been integrity there, but I’m really
focused on building [the lifestyle Web site] Goop and using
that celebrity aspect of my life to further enrich my own
brand.” Paltrow added, “It was more important for me to align
goals and values and find a true business partner.”
DETAILS:• Under the new U.S. based joint business venture,
each of the companies and Gwyneth will hold stock in
the other.
• The deal is for a five year term plus renewal.
• Gwyneth will hold the title of Juice Beauty’s Creative
Director, Makeup.
• Goop and Juice Beauty are developing a skincare
collection slated to reach the market in early 2016.
• The company is aiming to become a multi-hundred-
million-dollar beauty brand over the next five years.
KK:
This is not the first time the brand has played the celebrity
card. In 2012, Actress-turned-vegan-guru Alicia Silverstone
created a capsule collection for distribution online and
Ulta. However, Goop hired former Martha Stewart Living
Omnichannel CEO Lisa Gersh last fall to transition the site
from a known brand to a powerful business. This deal would
be a move in that direction. Gwyneth Paltrow can be a
polarizing so leveraging her celebrity will not be without
its challenges for Juice Beauty but with business intentions
aligned, it could push the business into the stratosphere.
SG:
Certainly, this deal has the potential to be massive in
a Jessica Alba / Honest Company way. Juice Beauty’s
distribution plus Goop’s reach make for great synergy and
should help build the brand. It stands to reason that these
core data points are well known and therefore the basis for
the deal. Assuming Gwyneth can keep on the right side of
the consumer, this could be a big one to watch unfold.

HAIN CELESTIAL
ACQUIRES BELVEDERE
INTERNATIONAL
WHAT:Founded in 1981 by Rucco Donald Belvedere, Belvedere
International, Inc., is a family-owned company led by Larry
Romagnuolo, president, and CEO. The Canadian-based
consumer goods company has a variety of lines that
encompass the baby, body and hair categories including
both niche and mass market brands, most of which are
focused on the domestic market. The largest is the Live
Clean brand that includes about 200 baby, body and hair
care products as well as several mass market brands sold
primarily in Canada and manufactured in a company facility
in Mississauga, Ontario, Canada.
WHY:Hain CEO Irwin Simon noted at a recent industry conference
that their goal is to double the sales contributed by
its personal care unit to $300 million to $400 million.
Acquisitions have played a vital part in Hain Celestial’s
strategy of building market share and widening the
company’s geographical presence, but also provided it with
opportunities to cross-sell products in the U.S., Canadian,
and European markets. “We are excited by the acquisition
of the Live Clean brand, which expands our presence in
the personal care category and complements our Avalon
Organics, Alba Botanica and Jason brands that we sell into
Canada,” said Irwin D. Simon, founder, president and CEO,
Hain Celestial. “This acquisition increases the scale of our
Canadian operations to over $150 million in net sales, and
provides us with opportunities for sales expansion and
cost efficiencies as we leverage our existing infrastructure
in Canada and our manufacturing and research and
development expertise in personal care.” ”The Live Clean
brand establishes a personal care base of operations in
Canada for Hain Celestial, which can serve as the foundation
for the continued growth of all our personal care brands and
provide us with an opportunity to expand the brand beyond
the Canadian mass channel,” said Beena Goldenberg,
president, Hain Celestial Canada.
DETAILS:• Hain Celestial has acquired health and beauty care
products manufacturer Belvedere International for an
undisclosed amount.
• In calendar year 2014, Belvedere had approximately $25
million in net sales and is expected to be accretive to
Hain Celestial’s earnings in fiscal year 2016.
• The Live Clean brand, according to the acquisition press
release, is the leading natural hair care and baby care
brand in Canada.
• Larry Romagnuolo will become General Manager Hain
Celestial Canada Personal Care, who will be responsible
for the Live Clean brand as well as our Avalon Organics®,
Alba Botanica® and JASON brands in Canada.
• The 500 Belvedere employees will be joining the Hain
Celestial Canada business division.
KK:
A good fit for the Hain Celestial portfolio. This acquisition
increased its footprint in the beauty and personal care arena
that is in line with the growth strategy. This could be the
first of many rumors that Hain could look at adding color
cosmetics to its mix of offerings. While Hain is capable of
making large acquisitions, it also has a history of buying
brands with a few million in sales and growing them into
substantial businesses. Time will tell.
SG:
A good and smart deal and not to mention the potential
to grow these brands in the US market. Shareholders love
bottom line growth and the market should respond well
to Hain on this one.

CASTANEA PARTNERS
TAKES STAKE IN THYMES
WHAT:Originally founded in 1982 and headquartered in Minneapolis,
Minnesota, Thymes creates highly curated fragrance
collections with product lines that include body and hand
lotions, bar soaps and bubble baths, candles, fragrance mists,
potpourris, reed diffusers, and refresher oils. The brand is sold
in over 5,000 specialty retail locations in the United States.
WHY:Robert Smith, managing partner at Castanea, said, “The
company is at a stage in its development where our sector
expertise and operating experience will add value as Thymes
pursues its growth potential.” Anne Sempowski Ward, chief
executive officer of Thymes, said, “This strategic alliance with
Castanea Partners will advance Thymes’s plans of continued
expansion into select premium and specialty distribution
channels, and significantly contribute to the next level of
our success.”
DETAILS:• Stone-Goff Partners has sold its equity stake in bath,
body and home fragrance brands Thymes to private
equity firm, Castanea Partners.
• Terms of the transaction were not disclosed, although
the middle-market private equity firm typically invests
between $15 million to $75 million of equity in businesses
where it has investing and operating expertise.
• Troy Stanfield of Stanfield Capital and a former Castanea
Partner will join the board of Thymes.
• Stanfield organized an investment syndicate that also
includes Stanfield Capital, RCPDirect II LP, Northstar
Mezzanine Partners VI LP and management.
• Ropes Gray advised Castanea Partners, a middle-
market consumer-focused private equity firm, on its
investment in fragrance brand Thymes.
• Imperial Capital and law firm Fredrikson Byron
represented Thymes and Stone-Goff.
KK:
Thymes has established itself in its close to 30 years in
business as the go-to bath and body brand across multiple
distribution channels. In 2012 Anne Sempowski Ward, a
PG veteran succeeded long-time co-founder and CEO,
Stephanie Shopa. It seems that this new partnership could
be part of an expansion strategy for the brand.
SG:
Given typical private equity returns benchmarks, it will be
interesting to see what Castanea and Thymes has in store
for the brand’s growth. Both teams bring heavyweight talent
on the investment and management sides of the table that
will undoubtedly unlock the potential for this business.

ATELIER COLOGNE
RAISES FIVE
MILLION EUROS
WHAT: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 26 countries and approximately
300 doors, including four owned stores in New York and Paris.
WHY:The brand was self-funded at launch with subsequent angel
funding in 2012 and 2013 to help the company open its
Paris flagship. The cash infusion will allow the business to
implement a new development plan, with the aim of growing
the brand as a leader in the “niche fragrances” segment.
First on the agenda: the opening of new boutiques, the
development of travel retail sales, and the development of
new products.
DETAILS:• Atelier Cologne has closed a new round of funding worth
5 million euros, or $5.7 million at current exchange.
• Half of the capital raised comes from Paris-based
independent management fund Extendam. The remainder
came from Club des Amis-Investisseurs, comprised of
both former and new investors.
• The brand currently generates 20 million euros (17.5
million US dollars) in retail sales, about 7 million euros (6
million US dollars) at the company level.
• Atelier Cologne makes 15% of its sales in France, 20% in
the rest of Europe and in Russia, 35% in the United
States and Canada, 14% in Asia, including China, 10% in
the Middle East and 6% on the internet.
KK:
The niche fragrance category is hot both at retail and in
the world of MA. This cash infusion should fuel the
growth trajectory of the brand in a sustainable manner,
maintaining existing relationships and allowing for expand
into new channels.
SG:
The niche fragrance model seems to work: branding +
product + a few boutiques + key distribution points globally -
add capital, grow, and get bought. Is Atlelier Cologne next?

UNILEVER ACQUIRES
REN SKINCARE
WHAT:Created in 2000 by former brand consultants Antony
Buck and Robert Calcraft, REN pioneered a new type of
high-performance skin care. The brand’s combination of
effectiveness, naturalness, and pleasurable experience –
articulated as ‘performance; purity; pleasure’ – gives the
brand a highly distinctive market position that has global
relevance. The brand is currently sold in 50 countries
predominantly in specialty stores and pharmacies with a
committed consumer base.
WHY:Unilever is slowly moving away from its underperforming
food businesses and is planning to expand its personal care
business through acquisitions. “We are delighted to be adding
REN to the Unilever portfolio of personal care brands,” said
Vasiliki Petrou, Unilever SVP Prestige Brands. “It is a brand
with an incredibly loyal following, with a unique proposition
that no doubt gives it potential for even further growth,
especially given that the naturals category is one of the
fastest growing in skin care globally. Its premium positioning
complements well our existing portfolio.” “It’s been an
amazing experience creating and building REN over the last
15 years, but it’s time for the brand to go to the next level,”
said Antony Buck, CEO, REN. “Unilever is a great company
with great principles; it has a profound understanding of
brands and global reach, and it makes the perfect partner to
help REN fulfill its future potential worldwide.”
DETAILS:• Terms of the deal were not disclosed.
• It had sales of $62.6 million in 2013, 70% of which
were derived from 50 countries. This underscores REN’s
global reach despite a relatively small scale
of operations.
• REN had global sales of more than $110 million last year,
Euromonitor estimates.
• REN generates 70% of its revenues from 50 countries,
giving it the global rollout potential that a multinational
such as Unilever seeks.
KK:
Unilever’s acquisition of REN Skincare is a positive but
small step towards consolidation of their position in the
global personal care market. With the deep pockets of
Unilever, the growth potential for REN is unlimited.
SG:
Unilever is clearly committed to building its personal care
portfolio and will undoubtedly make things interesting in
the market. The acquisition of REN sets it up to be a player
in prestige amongst the Lauder and L’Oreal’s of the world
and I predict this to be just the beginning for Unilever.

INTER PARFUMS SA
ACQUIRES ROCHAS
WHAT:Founded by Marcel Rochas in 1925, the brand began as
a fashion house and expanded into perfumery in the 50s
under Hélène Rochas’ direction. The Rochas fashion brand
has been shuttered numerous times in the past. Following
Marcel’s death in 1955, the company dismantled its fashion
operation, opting to concentrate on fragrance. It launched
scents such as Madame Rochas, Monsieur Rochas, Eau de
Rochas and Audace. Wella purchased Rochas in the late
Eighties and resurrected the fashion, but Irish designer
Peter O’Brien, on whom the house called in 1989, failed to
generate buzz. Olivier Theyskens succeeded O’Brien in 2003.
Despite critical acclaim, PG, which inherited Rochas that
year as part of its purchase of Wella, recognized fashion
wasn’t a core competency and closed the then money-losing
Rochas fashion business in 2006.
WHY:The Rochas sale comes as PG is slimming down to focus
on more profitable brands. At the time, a PG spokeswoman
said: “Running a fashion business in terms of the distribution
chain requires specific skills. We had to make tough choices.”
Inter Parfums SA has been particularly open to acquisitions
since the March 2013 termination of the Burberry beauty
license agreement. The deal marks a first step into fashion
for the Paris-based subsidiary of Inter Parfums Inc. of New
York, whose stable of licensed fragrance brands includes
Montblanc, Jimmy Choo and Van Cleef Arpels. Jean Madar,
Chairman and CEO of Inter Parfums, Inc. declared: “For
the first time, this acquisition will integrate both fragrances
and fashion. It will open up new opportunities in terms of
creativity as well as aesthetic design and marketing choices.
It will also allow us to apply a global approach to managing
a fragrance brand boasting very high name recognition and
without time constraints.
DETAILS:• The purchase price was $108 million.
• In 2014, Rochas registered net sales of $46 million,
bolstered primarily by the Eau de Rochas fragrance
line. That includes $2 million of royalties generated by
licensee agreements for Rochas fashion and accessories.
• This transaction will cover all brand names and
registered trademarks for Rochas (Femme, Madame, Eau
de Rochas, etc.), mainly for class 3 (cosmetics) and class
25 (fashion).
• Boutique investment firm Ohana Co. advised PG on
the sale.
• Financo, LLC represented Interparfums S.A.
KK:
The Rochas fashion label has certainly been passed around
over the years. Hopefully, it has found an owner that can
truly breathe new life into the brand. There is no doubt that
Inter Parfums can turn the fragrance around, but it will be
interesting to see what their intentions are with the fashion
side of the business.
SG:
Iconic brands with authentic backstories and the financial
wherewithal to build upon their heritage can make for
valuable businesses. This deal, at roughly 2.3x sales illustrates
– dare I say – synergy at its best between the parties.

SAN FRANCISCO
EQUITY PARTNERS
ACQUIRES MAJORITY
STAKE IN JAPONESQUE
WHAT:Japonesque was founded in 1984 and has a deep heritage
of creating beauty products inspired by the professional
makeup tools used in Kabuki theater in Japan. Japonesque’s
professional makeup tools and bold, bespoke cosmetics are
more than just accessories to beauty. Favored by celebrated
makeup artists and beauty professionals worldwide, Japonesque
products are crafted with precision in mind. Exceptional
materials, superior craftsmanship, and their uncompromising
standards have allowed them to create some of the most
desired beauty accessories in the world for their customers.
Japonesque products can be found at leading retailers in the
prestige beauty, drug, and mass channels.
WHY:San Francisco Equity Partners - SFEP is partnering with
current Japonesque owner Karen McKay, an industry
leader in the beauty tools category, to capitalize on the
extraordinary momentum in the business. “Japonesque has
experienced tremendous growth over recent years,” said
Scott Potter, Managing Partner at San Francisco Equity
Partners. “Karen and Japonesque are recognized leaders
in the beauty category and we look forward to providing
Karen with the financial, strategic and operational support
to capture the exponential growth opportunities in front
of the company.” “We were seeking a partner to help
Japonesque fully capitalize on the recent expansion of our
distribution channels and the increasing demand for our
beauty program. Given SFEP’s proven track record of working
with consumer growth companies at a similar stage of
development such as Method Home, Yes To, and ICU Eyewear,
they were an obvious choice for Japonesque,” said Karen
McKay, President and CEO of Japonesque.
DETAILS:• San Francisco Equity Partners (SFEP), a private
equity firm exclusively focused on expansion-stage
companies in the consumer industry, announced
that it has acquired a majority stake in beauty
company Japonesque.
• Terms of the transaction were not disclosed
• Industry sources estimate that Japonesque generates
retail sales south of $25 million.
• Aspect Consumer Partners, LLC acted as exclusive
financial advisor to Japonesque in connection with
the transaction.
KK:
SFEP has a track record of success with growth strategies for
brands at this stage. Japonesque could become the category
leader under the guidance of SFEP.
SG:
San Francisco Equity Partners has always made very deliberate
investments in the beauty space and this one is no
exception. With an already established base of distribution
outlets, the potential for Japonesque with additional
resources to grow seems unlimited. This is one to watch to
see how the fate of this deal evolves.

WHAT:The Daytona Beach, Fla.-based brand was founded by
Philippe and Sylvie Hennessy in 1991. Pevonia was the first
company to develop a spa skincare line exclusively for the
professional channel marketing spas and aestheticians.
WHY:The purchase comes after TSG sold all but one of the
beauty brands in its portfolio over the last several years.
Philippe Hennessy said sole ownership will allow him to
“execute our vision for the future.” That vision includes
expanding in spas across the U.S. and beyond the 119
countries where Pevonia is sold, said Shawn Morgan, the
company’s vice president of sales.
DETAILS:• The founders Philippe and Sylvie Hennessy, repurchased
100 percent of the company from the private equity
firm TSG Consumer Partners.
• The brand is targeting 10 percent sales growth over the
next year, and 20 percent growth the following year.
• Philippe Hennessy will maintain his role as president and
chief executive officer, with plans to take a more hands-
on approach, and his wife Sylvie, who serves as executive
vice president, will continue to oversee educational and
research and development.
KK:
The Hennessy’s were visionary in their launch of Pevonia
and instrumental in the development of the spa industry
as we know it today. Founders of a successful brand bring
something to a business that is intangible and not easily
replicated regardless of the amount of capital infused. It
will be interesting to see what the founders have in store
for Pevonia this time around.
SG:
While it’s unclear what the drivers of this buyback are, TSG
has shed its beauty holdings which may be indicative of
a strategic shift in focus exiting of assets based on the
achievement of return milestones (or not), or other reasons
we may never know of. Buybacks often signal opportunity
that is not apparent to outsiders but in this case, there
appears to be authentic expansion potential in Pevonia that
will be ignited at its roots with the founders back in control.
PEVONIA FOUNDERS
REPURCHASE COMPANY

WHAT:As a skin therapist from the UK, Jane Wurwand identified a
lack of continuing skincare education when she first arrived
in LA in 1983 and formed The International Dermal Institute
in a small classroom. In 1986, Jane and Raymond Wurwand
launched Dermologica to serve the needs of licensed skin
care professionals and address skin problems. Today, its
range of at-home and specialist products are sold in over 80
countries. Headquartered in Carson, California, Dermalogica
also has operations in the U.K., Australia, Ireland, and Canada.
WHY:Dermalogica is a strategic pillar for Unilever’s growth,
complimenting the acquisitions of REN Skincare and Kate
Somerville Skincare. Purchased for an undisclosed amount,
the acquisition of Dermalogica is expected to significantly
boost the company’s profile in the high-end space. Paul
Polman, CEO of Unilever, said: “We are delighted to be
adding Dermalogica to the Unilever Prestige personal care
portfolio. Dermalogica enjoys an outstanding reputation
and incredible awareness among skin care professionals
and consumers alike and has a clear positioning as a superior
skin health brand that perfectly complements the rest of
our Prestige offering. Importantly, it is a company founded
on strong values and a common belief, shared by Unilever,
in the role of business as a force for good in society.” Jane
Wurwand, Dermalogica Founder and Chief Visionary, said: “This
partnership will provide Dermalogica with the opportunities
and resources to take the brand to even greater heights
and help us continue our legacy in supporting the next
generation of professional skin therapists and women
entrepreneurs worldwide.”.
DETAILS:• Terms of the transaction were undisclosed.
• Dermalogica will be part of the Unilever Prestige Division.
• Dermalogica will continue to manufacture, operate and
work out of its Global headquarters in Los Angeles, California
• Sales were $240 million in 2014.
• Founders Jane and Raymond have retained an interest in
the company and will continue to work with Unilever to
grow the brand.
• Cravath is representing Unilever in connection with
this transaction.
KK:
Rumor of a Dermalogica sale have circulated for years.
Unilever’s acquisition strategy seems clear, acquire a stable
of well performing, mature niche brands with premium
positioning leverage synergies to grow their Prestige Division.
SG:
Our list of strong growth and acquisition targets shortens
with brands like Dermalogica being taken off the table.
Unilever accesses so many terrific assets across distribution
channels and cultures in the deal and not to mention a time
proven global brand with tremendous growth potential. With
Dermalogica’s deep history and roots, it stands to reason
that several opportunities can be created to cross-pollinate
and expand Unilever’s growing portfolio.
UNILEVER BUYS
DERMALOGICA

WHAT:Founded in 2003 by Kathy Phillips, the international
beauty director for Condé Nast Asia and the health and
beauty director of British Vogue. The U.K.-based brand sells
aromatherapeutic beauty products across several categories
including body care, skincare, and sleep. The company is
committed to providing natural solutions to address specific
modern beauty needs. Products are tested and evaluated by
a diverse group of 50 women who are instrumental in the
product development process. This Works does not launch
a product until its panel of women tells them, “this works.”
This Works’ business is primarily generated from thisworks.
com and UK-based wholesale accounts.
WHY:“We intend to invest in additional PR and marketing
activities, in-store merchandising initiatives and customer
acquisition efforts for our e-commerce sites in the U.K,”
said Richard Gersten, a partner at Tengram. “We also plan
to launch the brand in the U.S. market and are targeting
prestige, specialty and home shopping channels as the
distribution points. In connection with the new distribution,
we will seek new distribution opportunities outside of
the U.K. and the U.S.” Founder Kathy Philips, said: “My
experience in the health, wellness, and beauty industry
inspired me to create natural products that are truly
effective. Our innovative products use the highest quality
natural ingredients and deliver sophisticated solutions for
modern beauty needs. I am proud of what the Company has
accomplished thus far, and our partnership with Tengram
will further propel the Company to its next phase of growth.”
This Works Founder CEO, Anna Persaud, added, “I am also
very pleased to partner with Tengram on this opportunity.
Tengram has extensive beauty industry knowledge and a
network of resources that will help build our business. I look
forward to working with them to build upon the brand’s
strong momentum and execute on the Company’s many
growth opportunities.”
DETAILS:• Terms of the transaction were not disclosed.
KK:
The brand uniquely occupies the intersection of prestige
beauty, health and wellness and the natural product space.
They are also the only beauty brand making a direct
connection with sleep and beauty in products. Twelve years
in with the addition of capital and Tengram’s experience at
building brands they are positioned to capitalize on a the
long near trend where taking care of yourself is becoming
the ultimate way to stay beautiful.
SG:
Under Rich Gersten’s leadership, Tengram has been
assembling a truly exciting portfolio of beauty brands, each
with tremendous differentiation, category carving strength,
and substantial revenue growth potential. Rich’s experience
nurturing great brands and teams will undoubtedly prove to
be a core pillar of This Works’ success moving forward.
Adding the power of social media and community-based
engagement in the US market to the mix, great things
should happen for this unique brand.
TENGRAM PARTNERS
INVESTS IN THIS WORKS

WHAT:Founded by Mark Levine and Michael Dubin in July 2011 with
a simple concept - a subscription service for buying razors. A
funny but low-budget YouTube video, “Our Blades are F****
Great,” went viral and the tiny start-up, self-funded with $35k,
found itself with 12,000 orders overnight and on their way to
becoming a leading provider of quality razors to its two million
members. Three years later, that video has over 19 million
views, and the company is valued at $615 million dollars.
WHY:According to the WSJ the company is burning through “low
single digit millions”. While YouTube got them started, Dollar
Shave Club has moved to the more traditional and expensive
medium of television ads to attract new customers. The WSJ
also mentioned that on average, the company’s consumers
pay a subscription fee of about $7 per month. The company
has also branched out into other men’s grooming products
to increase average order size. Besides additional investments
in marketing, the company plans to use the capital infusion
to support new hiring, according to Dubin.
DETAILS:• The company is valued at $615 million which is the
result of fast revenue growth.
• Most recent funding $75m Series D on June 21, 2015,
and lead by Technology Crossover Ventures.
• Total funding received to date $147.8m in 5 rounds by
17 investors
• $1 million seed, May 2012
• $9.8 million/Series A, November 2012
• $12 million/Series B, October 2013
• $50million/Series C, September 2015
• The company has also secured a $60 million line of
credit from Comerica and Triple Point Capital that has
not been drawn on.
• Sales were $65 million in 2014; triple the prior year’s figure.
• This year the company hopes to do more than $140
million in sales but is not yet profitable.
KK:
Proof that success can come in the form of a simple, well-
executed idea and pushing the envelope with creative. That
being said they chose to be a challenger brand and their
competition is formidable and has deep pockets - Gillette
owned by PG, Schick owned by Energizer Holdings and
Harry’s which raised $212 million and purchased its own
factory in Germany to make its razors. Dollar Shave Club is
not profitable, has a burn rate in the low millions, and a low
average order size so the question is how long can it be
sustained or do they already have their exit planned?
SG:
Lightning strikes and alas a business? I want to know what
Plan B was if the YouTube video didn’t catch on. Lucky for
Dollar Shave Club, it worked and there is a business but the
big question is – is it sustainable and can it grow profitably
over the long term?
DOLLAR SHAVE CLUB
RAISES $75 MILLION

WHAT:It’s SKIN is a prestige skincare brand established in 2006
by a Korean dermatologist. The business expanded into
international distribution in 2008 and recently opened a
flagship store in New York City. The brand is very popular in
the Chinese market.
WHY:According to Beauty Packaging Magazine, Jumei
International Holding Limited is China’s leading online
retailer of beauty products. Mr. Leo Ou Chen, founder and
CEO of Jamie, stated, “The popularity of Korean beauty
products in China has grown rapidly over the past few years.
With an extensive catalog of prestige products, It’s SKIN is an
ideal partner for Jumei to collaborate with as we build Jumei
Global into the largest cross-border e-commerce platform in
China. It’s SKIN will greatly benefit from the growing size and
scale of our platform.”
DETAILS:• Jumei International Holding Limited acquired a
minority stake.
• Jumei, listed on the NYSE, is Chinas leading online retailer
of beauty products as measured by gross merchandise
volume, with a market share of 22.1% in 2013.
• It’s SKIN will benefit from the cross border growth Jumei
is pursuing in China.
KK:
Korea is a hot bed of beauty innovation and no one
questions the potential business opportunities in the
Chinese market. However, it’s a difficult market to navigate
on many fronts and will continue to get more competitive.
This transaction seems to be a win-win. Jumei gets a bit of
control with a popular brand, and It’s SKIN gets home market
advantage with a partner that has tremendous reach.
SG:
Right time, right market. Mix high-growth brand with
distribution, massive market, capital and Korean popularity
and grow. Leveraging Jumei’s retailing platform in the
dominant ecommerce channel is highly strategic and a smart
way to build value. We will undoubtedly see more examples of
these kinds of deals in Asia and other evolving markets in the
coming months and years.
JUMEI TAKES
A MINORITY STAKE
IN IT’S SKIN

WHAT:P2 Cosmetics is one of Europe’s leading beauty brands. P2
Cosmetics was founded in 2004 as a division of Palmers
Textil, a leading Austrian lingerie retailer. The products are
manufactured in Germany and France and are 100% paraben
and fragrance-free. It has since become a mainstay in the
German beauty industry and is known for its extensive
product portfolio. P2 Cosmetics are sold exclusively at DM,
Germany’s largest drugstore retailer.
WHY:“P2 Cosmetics has a proven track record of bringing
innovation to the cosmetic category,” said Gregory Mager,
Founder and CEO of Maesa Group. “This brand has piqued a
strong interest for expansion in the United States and Canada
through an exclusive distribution model. I am excited for one
of the most successful exclusive beauty brands in the world
to join Maesa Group, and I look forward to continuing to grow
the partnership with DM.”
DETAILS:• The acquisition was financed with debt provided by
Tikehau Investment Management and a capital increase
subscribed by Maesa Group’s founders, along with
Edmond de Rothschild whose stake in the Maesa Group
will raise from 20% to 25%. The balance is held by Maesa
Groups management team with co-founders, Gregory
Mager and Julien Saada remaining majority shareholders.
• Maesa Group’s total revenues are expected to reach
$185 million in 2015, post-acquisition.
• Through this acquisition, Maesa Group is affirming a
strong growth ambition for the next five years, with the
goal to reach $350 million in revenue by 2020.
• The brand will continue to operate out of Vienna, Austria
under the brands current leadership team.
KK:
Maesa has strategically put a new face on private label and
capitalized on retailers’ need for differentiation by creating
exclusive brands. P2 fits nicely with Maesa Group’s existing
holdings, Flower for Wal-Mart, Circa for Walgreens and Elle
for Monoprix. Through this acquisition, Maesa adds significant
revenue to its books. Is Maesa planning to become a player
in the competitive MA landscape? Or was this a singular
strategic transaction?
SG:
This was a smart and calculated deal; adding a major
building block to Maesa’s business as well as building upon
its global reach. As the global personal care market evolves,
I believe we will see more such deals and Maesa’s growing
ambitions are to be watched.
MAESA GROUP ACQUIRES
P2 BEAUTY BRAND

WHAT:The whimsical color cosmetic brand was founded in 1998
by Jerrod Blandino and Jeremy Johnson as an antidote to the
serious makeup artist brands that were the trend in the late
Nineties. “We built Too Faced with the idea that makeup is
power and should be fun, not intimidating—and our brand
acceptance today proves that women everywhere share our
belief in the transformative power of makeup,” said Jeremy
Johnson, Co-Founder and Chief Executive Officer of Too Faced.
WHY:“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.” Brand Co-founder Jeremy
Johnson said, “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.’”
DETAILS:• In 2012, the private equity firm Weston Presidio
purchased a majority stake.
• The brand is estimated to generate $150 million in
wholesale revenues annually with sales growing at more
than 50% per year.
• Terms of the deal were not disclosed but according to
the WSJ, the deal values Too Faced Cosmetics at
$500 million.
• Too Faced’s co-founders, Jerrod Blandino, and Jeremy
Johnson, will continue to hold stakes in the company
and run it as chief creative officer and chief executive
officer respectively, along with its president, Eric Hohl.
• Beauty industry veteran Ken Stevens will join as Too
Faced’s Chairman, bringing a wealth of experience as
former Chairman of Ulta Beauty, former Chief Executive
Officer of philosophy, and former President of Bath Body
Works. Andrew Crawford and Andrew Ferrer, both senior
leaders on General Atlantic’s Global Retail Consumer
sector team, will also join the Board of Directors.
• Too Faced was advised by Piper Jaffrey Co., Intrepid
Investment Bankers LLC, and Kirkland Ellis LLP.
• General Atlantic was advised by Financo and Paul, Weiss,
Rifkind, Wharton Garrison LLP. Financing for the
transaction is being arranged by KeyBanc Capital Markets.
KK:
The company was recently put up for sale by Weston
Presidio Capital, which has been a majority shareholder since
2012 so this transaction comes as no surprise. The action
attracted interest from bidders like Estee Lauder but with
key leadership staying in place and a simple change of hands
from one PE firm to another, I expect it to be business as
usual for the brand.
SG:
The market does not see many deals like these – a still
thriving pedigree brand that carved a deep market position,
killer management team, and a second set of financial owners.
The roster of players involved here is a Who’s Who in deal
making. In the era of the billion-dollar business, expect to see
General Atlantic eyeing an exit in the next few years. As the
business’s growth unfolds, the owner to be will reveal itself.
TWO FACED COSMETICS
FINDS A NEW INVESTOR

WHAT:Based in the industrial Ruhr Valley city of Hagen and
with roots dating back to 1821, Douglas is one of the
largest perfumery chains in Europe. The chain has 1,700
stores in 19 markets, including those held under the
Nocibé name in France, which was acquired last year.
Its multi-channel offering is integrated across the stores,
online shop and mobile. The company controls about
17 percent of the European perfume chain market.
WHY:Under new ownership, the German retailer plans to expand
further internationally. “Douglas is a market leader with
attractive growth prospects due to its strong management
team, extensive store network, leading online presence and
dedicated employees,” commented Søren Vestergaard-
Poulsen, managing partner at CVC. “We are very much
looking forward to working with the family and the
management to grow this European Beauty champion
further over the long-term.” Dr Henning Kreke, CEO of
Douglas and a representative of the Kreke family, said:
“Over the past two years, Douglas has become the largest
specialist beauty retailer in Europe. It is renowned for its
clear customer focus, innovative product portfolio and an
impressive in-store and e-commerce presence. We look
forward to partnering with CVC as a reliable and strong, long-
term partner who will support the company with additional
industry expertise and financial resources, to ensure our
continued growth.”
DETAILS:• Private equity firm CVC Capital Partners has signed an
agreement to acquire German beauty retailer Douglas
for an undisclosed sum.
• The WSJ says the deal values Douglas at around
$3.1 billion.
• Pro forma annual sales for Douglas for 2013-14 were
reported to be about 2.5 billion euros, or $3.39 billion.
• The retailers online offering, which spans 15 countries
and has reached a market share of over 50% in
Germany, contributed more than 8% of the Company’s
total consolidated sales in 2013/2014.
• Following the deal with CVC Capital Partners, the Kreke
family will remain a shareholder in Douglas, holding a
15% stake- down from 20%.
• Henning Kreke will stay on as CEO.
• In a statement, it was revealed that the three parties had
decided not to pursue an IPO in order to accommodate
the Kreke family’s desire to develop the business in a
private setting.
• The deal does not include the other retailers formerly
under the Douglas Group umbrella, Thalia booksellers
and the AppelrathCüpper fashion chain.
KK:
CVC has significant experience in the retail and beauty
sector and Douglas is poised to become an international
brand. This international expansion could provide significant
growth not only for the retailer and but for the brands they
currently stock
SG:
We don’t see deals like these very often. This retailing
powerhouse is growing into an even stronger global staple
in the beauty space. With substantial growth potential in
its e-commerce channel and ambitions to grow profitably,
I believe we will see of bolt on and core acquisitions by
CVC and the Kreke family in omni-channel retail and
branded businesses.
DOUGLAS ACQUIRED
BY CVC CAPITAL

WHAT:The Company, founded by stylist French-born hairstylist
Frederic Fekkai in 1995 as part of a joint venture with
Chanel called Frédéric Fekkai Beauté. The Fekkai business is
comprised of seven salons in New York, Connecticut, Florida,
Texas and California along with the retail hair care range.
WHY:As part of its plans to divest parts of its beauty portfolio,
the Procter Gamble Co. has sold the business — which
includes retail hair-care products and seven salons — to
Fekkai Brands, a joint venture between Designer Parfums
and Luxe Brands. Luxe Brands CEO Tony Bajaj said the two
firms, which have experience in fragrance and more recently
in skin care, were looking to enter the premium hair-care
category, and that Fekkai more than fits the bill. “It resonates
with a broad spectrum of consumers,” said Bajaj. That
said, he added that the joint venture would work to assess
Fekkai’s current distribution, which PG had broadened to
the mass market.
DETAILS:• This deal marks the third time the 20-year-old brand has
been sold.
• Nearly ten years later, the brand was acquired by the
private equity firm Catterton Partners.
• PG paid an estimated $440 million for Fekkai in 2008
and sold the brand for what sources estimated was only
$50 million. The price also reflects the work needed to
turn around the brand and the capital expenses required
to run the salons.
• Designer Parfums, a private family-owned business
dealing in perfumes and beauty products and LUXE
Brands, a prestige beauty company will form a joint
venture to buy the Fekkai business.
• Industry sources said that sales of Fekkai’s products
have sharply fallen off from highs in the $125 million
range to roughly $50 million last year.
• Sources estimate salon revenue at roughly $22 million.
• Under the terms of the deal, the brands founder,
Frédéric Fekkai, will retain his role as an advisor.
• All 255 Fekkai salon employees are expected to be
transferred to the new company.
• PG’s disclosure of the sale confirms a report that
appeared on WWD.com that Fekkai himself had tried
to buy back his brand, but in the end could not put a
deal together.
KK:
Mass, prestige or both? PG’s flawed distribution strategy
resulted in the loss of key premium distribution. Given the
sale price of this brand, it was clearly a huge mistake. While it
lost its way under PG’s management, Fekkai is still a strong
brand with much of its DNA intact. With a well thought out
strategy and the right leadership, this brand can be turned
around. Given it’s primarily a North American brand, there’s
plenty of opportunity for growth once it’s on the right path.
SG:
Fekkai’s strong professional heritage, PG’s flawed strategy,
and a lack of branded leaders in the premium haircare space
allows this brand to live on. Fekkai was an innovator; bridging
the gap between mass and professional channels. Before
Fekkai, prestige haircare was not readily found in specialty
and prestige beauty outlets. In many ways, he created a
category in these retail channels. Enter PG to leverage a
well-established and aspirational branded specialty gem in
the massive global haircare market and grow it in mass, but
that plan didn’t materialize – nor did a strong roster of
other branded players to fill the hole Fekkai left in specialty
and prestige. While some players have emerged, market
conditions and a preserved and authentic position makes for
another go around possible. I’m betting on this one.
FEKKAI FINDS
NEW OWNER

WHAT:Founded in 2002, The Real Shaving Company is a well-
established brand in the male grooming sector. Based
on quality natural and organic ingredients with heritage
expertise, The Real Shaving Company products are
available in the UK as well as Canada and France.
WHY:This acquisition is part of Swallowfield’s wider strategy
to leverage its product development, manufacturing
and distribution capabilities to commercialize innovative
ranges of products under their own brand names. The Real
Shaving Company brand is set to benefit from Swallowfield’s
expertise in innovative technologies such as plastic aerosols.
Chris How, Chief Executive at Swallowfield, commented: “We
are delighted to acquire such a well-established and well-
loved brand that will increase the branded element of our
business, in line with our stated strategy. We look forward to
bringing our industry-leading innovation, both in packaging
and formulation, to the Real Shaving brand, driving profitable
growth in the future.” He added: “It also gives us a presence
in trade channels that we are aiming to access with our
other recently introduced brands such as ‘Bagsy’, our
premium beauty brand, and ‘Tru’, our range aimed at the
value retail sector.”
DETAILS:• The purchase price, payable on completion of the deal,
includes an initial cash consideration of £900,000 with
further cash consideration of £100,000 dependent on
the outcome of certain customer negotiations, plus
stock at valuation, which is expected to be £170,000,
to give a total cash consideration of up to £1.17m.
• Underlying EBITDA of the brand for the 12 months
ended 31st March 2015 was £0.3m on net sales
of £0.8m.
• The acquisition is expected to be “earnings enhancing”
in the first full financial year of ownership.
• The acquisition will be financed with a new five-year
term loan of £0.72m with the balance from existing
bank facilities, all with HSBC Bank plc.
• The acquisition is conditional upon shareholder approval.
KK:
Not knowing much about this brand or the transaction
it appears the goal was to acquire distribution
through acquisition.
SG:
The men’s grooming category continues to evolve in most
markets and channels, so it’s no surprise to see continued
MA activity here – no matter the motivation.
SWALLOWFIELD
ACQUIRES THE REAL
SHAVING COMPANY

WHAT:Founded by the Los Angeles-based Kate Somerville,
the brand is known for its innovation and performance.
Products feature Active Balance Technology, a blend of
advanced active ingredients with natural botanicals. The
brand is currently distributed through prestige retailers
in the U.S. and is said to have a growing footprint in Asia.
WHY:“The most photographed faces in Hollywood trust Kate
Somerville Skincare for its high-quality ingredients,
proven results and a touch of glamour. It is a highly
differentiated brand that is well placed in the
dermocosmetic segment of the skin-care category,”
said Vasiliki Petrou, Unilever senior vice president,
prestige brands. “In recent years Kate Somerville
Skincare has also made inroads into the fast-growing
Asian market, with successful launches in several
countries across the region. We believe it has exciting
growth potential, and look forward to bringing its
breakthrough products to new markets. Its premium
positioning effectively complements our existing
portfolio,” he added. Somerville said she is “extremely
proud” of everything her team has accomplished. “Our
treatments such as ExfoliKate and DermalQuench have
become tried-and-true customer favorites. Unilever
shares our commitment to quality, innovation and
bringing consumers the best possible products…and I’m
confident it will take Kate Somerville Skincare to even
greater heights.”
DETAILS:• The deal terms were not disclosed.
• Founder/spokesperson Kate Somerville and CEO
Michelle Taylor will continue in their current roles.
• Financo represented Kate Somerville in the deal.
• Leading global law firm, Baker McKenzie,
advised Unilever.
• The transaction marks the third in a series of recent
strategic skincare deals for Unilever.
• Kate Somerville is distributed through prestige
retailers in the United States, and has a growing
footprint in Asia.
KK:
Unilever’s Prestige division includes the skin-care
lines Iluminage and Ioma; hair-care brand Nexxus;
and Regenerate, an advanced toothpaste that aims
to reverse enamel erosion. Earlier this year, the
multinational giant purchased Britain’s REN Skincare.
SG:
Unilever is snatching up some of the industry’s best
growth brands. As a fast-growing skincare mainstay,
Kate Somerville has stood the test of time and has
wisely navigated the growth and financing of her
business. With both domestic and international
growth prospects looking strong, the brand will
add strong numbers to Unilever financials.
UNILEVER ACQUIRES
KATE SOMERVILLE

WHAT:CBBeauty was founded in 2011 by Corrado Brondi. The
company distributes and markets perfume and beauty
products under the One Direction brand in more than 80
countries, and provides international sales, marketing and
strategic services to a number of high-end and mass brands
including Rihanna, Carven and Burberry.
WHY:“As we continue to focus on our strategy of value creation to
boldly grow Revlon, we are confident that this acquisition will
provide us with a business and people platform for significant
growth in the global fragrance business,” Revlon president
and CEO, Lorenzo Delpani, said in a statement. This acquisition
expands Revlon’s global footprint and gives them control
of some important brands. In turn, CBBeauty will remain
independent but can leverage Revlon’s significant capabilities
and resources which will accelerate growth.
DETAILS:• Details of the transaction were undisclosed.
• The deal includes U.K. distributor SAS Company.
• CBBeauty and SAS will operate as an independently
managed division within Revlon, under the continued
leadership of Corrado Brondi as CEO of CBBeauty.
• Shelley Smyth will continue as CEO of SAS.
KK:
One Direction was one of the few women’s fragrances
showing sales growth in all mass doors last Christmas,
according to IRI data. The businesses growth was really
fueled by the One Direction success; however, partnering
with Revlon should accelerate growth leveraging their
significant infrastructure, capabilities, and resources.
SG:
This is a smart deal for Revlon, providing a growth engine
in branded, service, and infrastructure offerings. With a
roster of innovative brands under management, CBBbeauty
may be able to help Revlon attract other unique growth
opportunities, too.
REVLON ACQUIRES
CBBEAUTY

WHAT:Founded by CEO Lopo Champalimaud, Wahanda is a hair
and beauty booking website and marketplace. The hair and
beauty booking site is currently available in five countries
— U.K., Germany, Lithuania, Switzerland and Austria —
reaching 12,000 salons and spas, and expects to expand to
an additional three countries by June.
WHY:Recruit invested in 2014 and has been a very active
investors. Wahanda has sold a majority stake of the company
they are a pre-existing investor, Recruit Holding. Recruit
revealed they are going to put another $46MM into Wahanda
on top of what they have already invested. “With its Hot
Pepper Beauty business in Japan, Recruit has a wealth of
experience in this space and understands how to scale
our business. Our ambitions are aligned and the capital
investment, expertise and knowledge that Recruit provides
will enable us to continue on our growth trajectory, truly
cementing our position as the leader in our field.” Kazumasa
Watanabe, from Recruit Holdings, said: “This investment will
allow us to further improve our international position in the
hair and beauty industry. We recognized in Wahanda a world-
class team and a company that had already established
itself as the market leader in Europe. We look forward to
supporting them with the aim of becoming a global leader
in the beauty industry.” Wahanda continues to focus on
expansion within Europe and revealed it expects to be
present in eight countries by the end of June.
DETAILS:• Japans Recruit Holdings, which already owned 10% of
the London-based startup, has acquired a further 70%
share £112.5 million (~$171m).
• Wahanda’s other backers cashed out. These include
Fidelity Growth Partners, Ambient Sound Investments,
14W and Lepe Partners, along with private investors,
including Brent Hoberman (founder of Lastminute.com)
and Stefan Glaenzer (Partner at Passion Capital).
• According to TechCrunch, the acquisition means
that Wahanda was valued at approximately $222
million, while the startups founder and CEO, Lopo
Champalimaud, and its management team retain a
20% stake.
• Klaus Nyengaard will remain on the board as Co-Chairman.
• CEO Lopo Champalimaud will continue to work
alongside the company.
KK:
While we’ve seen a lot of investment made in booking
services and apps in the past year in the U.S. market. It will
be interesting to see if Recruit Holding has plans to enter
the U.S. market through acquisition.
SG:
Beauty service marketplaces aiming to streamline booking
and optimizing utilization are emerging very quickly,
especially in the US market. With a strong international
lead, it will be fascinating to watch how (and if) Wahanda will
penetrate the US market, where the sheer volume of hair
and beauty outlets is enormous.
RECRUIT HOLDINGS
BUYS MAJORITY
STAKE IN WAHANDA

WHAT:Strawberry Cosmetics, which is online retailer strawberrynet.
com, has a customer base of over three million worldwide.
Strawberrynet.com sells more than 700 brands and has over
30,000 stock keeping units. Brands listed on the website
include: Benefit, Bourjois, Avene, Fudge, Orico London, Priori,
Roger Gallet and Yves Saint Laurent, among others.
WHY:It is hoped the transaction will expose GigaMedia
to a broader business portfolio in the internet and
technology sector, allowing it to tap into the lucrative
beauty e-commerce market. GigaMedia aims to build
its connections in various Asian countries through the
transaction, namely China, Japan and South Korea.
DETAILS:• GigaMedia, an online games and computing services
company based in Taiwan, has acquired a 70% equity
interest in beauty e-commerce company Strawberry
Cosmetics for $93.1MM.
• The completion of the transaction is subject to the
Company’s shareholders’ approval at an extraordinary
general meeting of shareholders to be held on August 5,
2015 and other customary conditions.
• The transaction is expected to be completed in the third
quarter of 2015.
• Consolidated sales revenues of Strawberry Cosmetics
and its subsidiaries in the recent four years have been
over US$200 million per annum.
KK:
The growth of the Asian market especially China is still largely
untapped for many beauty brands. Given the challenges
of entering some of these Asian markets GigaMedia has
strategically positioned itself as a gatekeeper online.
SG:
It’s no coincidence that this is one of two Asian e-commerce
platform deals in Q2. There will undoubtedly be more deals
on the horizon amongst mainstays and newcomers, as
market and consumer access is predominantly found in well-
established e-commerce and mobile channels.
GIGA MEDIA BUYS
70% STAKE IN
STRAWBERRY
COSMETICS

WHAT:Mallygirl is a multi-cultural cosmetics brand founded in
2005 by Mally Roncal, a sought after makeup artist to the
stars. The brand has 1000 skus with primary distribution
in Ulta and QVC. The company distributes products from a
50,000-square-foot warehouse in White Marsh and also sells
online at MallyBeauty.com.
WHY:TPR affiliate Beauty Visions has acquired Mallygirl after the
US make-up brand filed for involuntary bankruptcy. Despite
$30 million in sales in 2014, Mallygirl was having financial
difficulties and missed regular loan payments to Essex Bank,
according to filings in Baltimore’s U.S. Bankruptcy Court. The
company owes the bank about $8.9 million in loans, interest
and late charges. In April, four of the company’s creditors
forced Mallygirl into a Chapter 7 bankruptcy, claiming more
than $2.2 million in debts. The case was subsequently
converted to a Chapter 11 bankruptcy, indicating Mallygirl
could reorganize its debts without liquidation. The company
was auctioned in the bankruptcy, with two companies
bidding the final price up 18 times from $7 million to $10
million, according to Heritage Equity Partners, an Easton-
based boutique investment banking firm specializing in
“special situations.”
DETAILS:• The deal was approved by the Bankruptcy Court in the
District of Maryland on June 5th and completed June
11th. Mallygirl started looking for a buyer back in August
last year, according to official court papers.
• TPR affiliate Beauty Visions’ takeover came as a result
of an auction process against another bidder. Over the
course of 18 bids, the price grew 43% closing at $10MM.
• Heritage Equity Partners (HEP) acted as broker for
Mallygirl and conducted the marketing process to
identify potential buyers.
• HEP worked with Chief Restructuring Officer Michael
Lang who provided crisis management.
• Annual sales of Mallygirl reached over $30MM in 2014.
KK:
There is a lesson to be learned in this Mallygirl transaction.
Regardless of how successful you appear or the size of the
revenue the numbers still need to match up. Not having a
plan is planning to fail. It appears that this brand simply did
not have its financial and back office in order, and it finally
caught up with them. TPR has a track record of success for
breathing new life into distressed businesses so let’s see
what they have in-store for Mallygirl.
SG:
Such high-profile branded situations like Mallygirl are not the
norm which is why further insight may prove to educate and
inform other brand owners on the pitfalls and perils of what
can go wrong when so much seems to be going or appearing
to go right. With a strong level of interest as evidenced by the
number of bidders, it will be exciting to see what new ownership
does to capitalize on this rare branded business opportunity.
BEAUTY VISION
BUYS MALLYGIRL

WHAT:Culver City, CA-based Cosmetic Design Group (CDG)
provides turnkey nail and cosmetic products, providing a
one-stop design and sourcing service for national brands
and retail customers. CDG boasts over 900 SKUs of in-line
and promotional products across value and mid-priced
segments, along with a portfolio of prestige offerings, which
are sold in over 5,000 retail locations.
WHY:The transaction allowed key management to invest in the
business ownership, which aligns interests and sets the
company on a path for future success. The investment
will accelerate CDG’s growth and allow expansion into new
products and markets, while acting as a platform for future
investments in the beauty and personal care industries.
DETAILS:• Corbel made the investment in partnership with Five
Crowns Capital, LLC - an independent sponsor located
in Newport Beach, CA.
• The investment is a non-control investment in the form
of senior secured debt and common equity to support
the continued growth of CDG.
• Opus Bank partnered with Five Crowns Capital and key
management of CDG to provide the working capital to
support anticipated organic growth.
• Opus Banks Corporate Finance division provided
$4,000,000.
• Revolving Line of Credit to Five Crowns Capital and
Cosmetic Design Group, LLC.
KK:
We’ve seen a lot of activity on the brand side but keeping an
eye on the supply side of the industry sometimes provides
insight into larger transactions or the building of vertical
businesses. In the right hands, there’s value in owning your
supply chain
SG:
CDG is a little known player to most but clearly important to
some branded and retailer players as a source of readymade
and custom solutions. This transaction provides insight
into other businesses, models and growth opportunities in
the personal care space, and may be a platform deal into
something larger.
FIVE CROWNS CAPITAL
AND CORBEL
STRUCTURED EQUITY
PARTNERS INVESTS IN
COSMETIC DESIGN GROUP

WHAT:The Honest Company was co-founded in 2012 by actress
Jessica Alba, Sean Kane, Brian Lee, and Christopher Gavigan.
The inspiration for the Company came from Alba’s allergic
reaction to a commonly sold laundry detergent. This
experience led her to research products marketed to
families and the realization that many are full of untested
and possibly toxic chemicals. Leveraging Alba’s celebrity
and Gavigan’s experience advocating for the education of
safe products for families, The Honest Company was born.
Initially, the Company’s products were sold via TV and the
internet and focused on remedies for baby. The Company on
consists of 120 different eco-friendly, non-toxic products and
distribution has expanded into brick and mortar outlets in
food, drug, and mass channels as well as some specialty and
department stores.
WHY:Coming off of last summer’s $70 million raise at close to
a $1 billion valuation, this $100 million dollar investment
values the company at $1.7 billion. While sales figures are
unpublished, it is said by Jeremy Liew, an early investor, that
80% of all revenues are derived from direct to consumer
customers receiving monthly deliveries of diapers and
other products. Use of proceeds are said to be for the
development and launch of a line of skincare, cosmetics
and hair care products, to support global expansion, and to
improve its distribution capabilities.
DETAILS:• The Honest Company raised $100 million at a $1.7
billion valuation.
• The investment came from 2 new investors: Glade
Brook Capital Partners and Alliance Bernstein, as well as
three existing investors including Fidelity Management
Research Company.
• Before this round, $70 million was raised last summer,
and $52 million was raised before that.
• Co-Founder and CEO Brian Lee also co-founded
ShoeDazzle with Kim Kardashian in 2009 which was
acquired by JustFab in 2013, and LegalZoom with Robert
Shapiro, OJ Simpson’s defense attorney.
KK:
It hasn’t been all smooth sailing for the Honest Company
this year with very public issues related to the efficacy of
their sunscreen all over social media. However, they stuck to
their core values of honesty and transparency and handled
this issue head on. With a CEO with a strong track record and
a group of seasoned investors, it looks like this business is
moving closer to the rumored IPO.
SG:
This is an awful lot of coin to deploy on building a brand
and with some “smart” investors at the table, one can
only assume the data supports the valuation and funding.
However, we all know what happens when we assume. Is
Honest here to stay? Will the company build itself into a
classic CPG? Only time will tell.
HONEST COMPANY
RAISES $100 MILLION

WHAT:First Aid Beauty (known as FAB), offers a range of skincare
products that include cleansers, exfoliators, moisturizers,
serums, and masks. The premise behind the brand is to bring
a luxury approach to drugstore treatments, with enhanced
formulations that can boost efficacy and results. Founded
in 2009 in Newton, MA by beauty industry veteran Lilli
Gordon, FAB products are free of harsh chemicals and known
allergens, and address skin concerns such as aging, dryness,
redness, eczema, acne and sun protection. First Aid Beauty is
distributed through Sephora, as well as other domestic and
select international beauty retail, and online.
WHY:Castanea Partners has a solid track record of investing in
unique and differentiated brands like DryBar, Thymes, and
Proenza Schouler. Said Castanea Managing Partner, Steve
Berg, “First Aid Beauty is uniquely positioned in the personal
care and beauty industry, and is an exciting opportunity for
Castanea.” “Lilli and the team have developed a differentiated
brand in the prestige category with a compelling range of
products,” said Janet Gurwitch. “FAB has great potential, and
we are thrilled to be part of the next stage of their growth.”
Lilli Gordon, Founder and CEO of First Aid Beauty, said: “Having
personally grown FAB every step of the way, I could not imagine
a better partner than Castanea. They embrace our brand
philosophy and have a deep understanding of the sector and
a proven track record. We look forward to working together
to fuel our original rescue mission to provide easy to use,
effective, feel-good solutions for universal skin challenges.”
DETAILS:• Castanea Partners acquired a minority interest in First
Aid Beauty.
• Steve Berg, Managing Partner at Castanea, and Janet
Gurwitch, Operating Partner at Castanea and former
Founder and CEO of Laura Mercier, will be joining
Clive Bode and Karen Mills on First Aid Beauty’s board
of directors.
• Financo represented First Aid Beauty in the transaction.
• Terms of the transaction were not disclosed.
KK:
Lilli Gordon is not your typical twenty-something beauty
entrepreneur. This brand is a testament to experience
leveraging an impressive resume working for others
into a startup of her own. She launched First Aid Beauty
in her mid-50s, relying on her experience, connections,
and determination.
SG:
With grit and determination, Lilli Gordon has found success
since founding the brand in 2009. She hasn’t wavered,
carving a new path in the skincare treatment space, and
consumers clearly agree with her vision since growth doesn’t
happen without ringing the cash register.
FIRST AID BEAUTY
LANDS INVESTMENT
FROM CASTANEA
PARTNERS

WHAT:StyleSeat is a platform for discovering and booking top beauty
and wellness professionals, from hair stylists to massage
therapists to personal trainers. Founded by Melody McCloskey,
the four-year-old platform works with 320,000 stylists in
15,000 U.S. cities and has booked more than 30 million
appointments. Stylists pay between $25-35 per month for
the service. In 2015, StyleSeat will help drive more than $1
billion worth of appointments.
WHY:In the race to acquire consumers and engage stylists,
StyleSeat is a player. Currently, the platform books about
1.5 million appointments a month. The biggest markets
are Chicago, Atlanta, Dallas and Houston with more than $2
million per month in appointment bookings. Mobile bookings
make up three-quarters of all appointments, and nearly
a third of appointments are booked within one day of a
previous appointment, showing the end users like the free
service enough to try it again. To date, the platform has been
able to increase average revenues for stylists by 70 percent
over the first 15 months they use StyleSeat. Future initiatives
include helping to connect stylists with customers for a fee.
Improvements in data intelligence will drive this. Additionally,
the company is focused on expanding the number of salons
on the platform by growing its salon business on a national
basis (beyond stylist directly).
DETAILS:• StyleSeat raised $25 million in Series B financing.
• The investment round was led by Fosun’s Kinzon Capital
with participation from Lightspeed Venture Partners,
Cowboy Ventures, and Slow Ventures.
• This latest investment brings the company’s total
funding to date to nearly $40 million, including a $10.2
million Series A last year as well as $700,000 and $4
million seed rounds in 2011 and 2013.
• Use of proceeds will go to marketing and technology to
boost activation amongst consumers and professionals.
KK:
There has been a
proliferation of MA
activity in service-based
mobile apps this year, but
StyleSeat has a leg up on its
competitors. Most beauty apps
are limited to a few major cities,
but StyleSeat has the competitive
edge being first to add scale
nationwide. In a relatively new, fast
moving segment of the beauty space,
this investment should go far in
establishing this app as the category leader.
SG:
Let’s think about this: StyleSeat books
1.5 million appointments a month, nearly a third
of appointments are booked within a day of a
previous appointment, and the platform has been
able to increase average revenues for stylists by 70% in
15 months. Wish I had skin in this game.
STYLESEAT RAISES
$25 MILLION

WHAT:Founded in 2003, Dallas-based Advanced Beauty Systems,
Inc. is a marketer of budget beauty spa-quality product lines
that include fragrance-based and aromatherapy products
under the Bodycology bath and body brand as well as Cantu
Hair Care. Bodycology is the number one specialty bath
brand in the US according to Nielsen Retail Sales data, while
Cantu, the fastest-growing multi-cultural hair care brand
in the U.S. and is quickly cementing its position as a go-to
solution for the unique needs of naturally textured hair.
WHY:In the second transaction between the two companies, PDC
Brands has acquired Bodycology and Cantu from Advanced
Beauty Inc. PDC is a joint venture with Yellow Wood Partners,
a private equity firm out of Boston. Advanced founder
and President Chris McClain, who used his knowledge as a
former Wal-Mart buyer to help build sales of Bodycology and
Cantu, said that with the sale of those brands he plans to
focus on building lines he still owns including Earth Supplied
Products, Toodaloo, and Aquation, as well as work on several
new concepts. “We are looking to buy brands that can be
number one or two their categories,” said James Stammer,
chief executive officer of PDC Brands. The company’s
portfolio includes Body Fantasies, which according to 2014
Nielsen data was number one in mass women’s fragrance,
and BOD Man, the top seller in mass men’s fragrances. PDC
also markets Calgon and The Healing Garden, which Yellow
Wood purchased from Ilex (which acquired them from COTY)
in 2013. While Bodycology is number one in the specialty
bath market, its share had been declining along with soft
sales in the category. “We feel we can give Bodycology and
the category the attention needed to bring back growth,”
Stammer said, noting that under PDC’s watch, Dr. Teal’s has
almost doubled in size. With the addition of Cantu, a fast
growing multicultural hair care brand, PDC expands beyond
its affordably priced fragrances and bath products. “Cantu is
a real gem,” said Stammer, adding that the line for naturally
textured hair needs has great credibility with consumers.
DETAILS:• Terms of the deal were not disclosed.
• This is the second transaction between the two beauty
companies. PDC, formerly known as Parfums de Coeur,
purchased Dr. Teal’s Therapeutic Solutions in 2014 from
Advanced Beauty.
• Advanced founder and President Chris McClain, used
his knowledge as a former Wal-Mart buyer to help build
sales of Bodycology and Cantu.
• According to Advanced Beauty, Inc., PDC has doubled
sales and profits since joining forces with Boston-based
private equity firm Yellow Wood Partners in 2012.
• PDC global sales are estimated at $400 million, a notable
30 percent increase in the last two years.
• PDC plans to expand even further by investing in our
current brands as well as adding new and unique brands
and products to our portfolio via acquisition according
to Cosmetic Business.
KK:
This transaction solidifies entrepreneurial PDC Brands’
position as an industry leader with the goods to compete
with major players. They are laser focused on bringing the
best of prestige beauty and specialty retail to mass-market
consumers at affordable prices.
SG:
There are many spaces in the beauty market outside our
purview and I wonder how many of our readership has heard
of Cantu, Bodycology, and Yellow Wood Partners? As Yellow
Wood gobbles up lower tier brands to sit on its platform, a
host of players – and opportunities – rise to the surface.
PDC BRANDS ACQUIRES
BODYCOLOGY AND CANTU

WHAT:Tata Harper Skincare is a Vermont-based natural beauty
company founded in 2007 by wife and husband team Tata
and Henry Harper. The Company offers both skincare and
cosmetics that are 100% natural and non-toxic, owns the
RD process and manufactures its own highly-concentrated
products, and is boasts environmental sustainability. Tata
Harper is an early natural entrant to premium personal
care, selling its products at retailers ranging from Sephora,
Neiman Marcus, and Space.NK, to high-end sports clubs and
apothecaries across the country.
WHY:According to ACG managing director, Julian Steinberg, “We’ve
been looking for a beauty investment for a long time, and
Tata Harper’s line hit every one of our criteria.” “It is an
aspirational luxury brand that’s also 100 percent non-toxic
and efficacious. The products are made in small batches and
use botanical ingredients the founders grow themselves.
The brand is already resonating strongly with consumers
and retailers nationwide, and we believe it has a significant
runway for growth.” Said Tata Harper, co-chief executive
officer of the brand, “After speaking to many potential
investors, we realized ACG was the ideal partner.” “Their
support for our brand vision is a key ingredient for us to
realize our full potential” added Co-CEO, Henry Harper.
DETAILS:• Tata Harper received a minority equity investment from
Alliance Consumer Growth (“ACG”), a leading consumer-
focused private equity firm
• The investment is thought to be between $5 million
to $15 million.
• Use of proceeds will enable the company to fuel its
continued growth and expansion.
• ACG currently holds minority stakes in Babyganics, The
Honest Kitchen, SUJA, barkTHINS, Kriser’s Natural Pet
and Shake Shack, among others.
KK:
Tata Harper has established a clearly defined and well-
articulated position in the natural category over its first
eight years in business. ACG has a reputation for identifying
innovative consumer and retail companies early, leveraging
its strong industry network and brand-building expertise to
help partner companies grow. This partnership seems like
the perfect fit.
SG:
The ACG guys have a way of finding a needle in a hay stack.
Their selective investment strategy within a defined set of
criteria appears to be working, as evidenced by their plays in
Babyganics, Shake Shack, and now Tata Harper. Amongst a
new breed of private equity investor, ACG has demonstrated
that there is something to betting smaller, niche, and riding
the tide of growth.
ALLIANCE GROUP
CAPITAL (ACG) TAKES
MINORITY STAKE IN
TATA HARPER

WHAT:Liz Earle Naturally Active Skincare is a British beauty brand,
founded in 1995. The Company was co-founded in 1995 by
beauty editor at the time Liz Earle and Kim Buckland, who
extended a friendship into a business partnership. Liz Earle
creates efficacious products that work on all skin types by
harnessing the potent powers of the finest quality naturally
active ingredients. The brand was launched on QVC in 1996
and a shop opened in Ryde in 2001. The Company currently
employs more than 600 people and sells in retailers in the
UK and internationally including company owned stores,
QVC, John Lewis, and Boots / Walgreens.
WHY:Avon bought Liz Earle in 2010, during Andrea Jung’s
tenure as chief executive officer, and had operated it as a
standalone business. In dealing with several issues in its core
business, Avon’s primary needs were to focus on turning
around the challenges in its core brand. Said Avon CEO
Sheri McCoy, “Avon remains committed to our strategic
priorities, and we are focused on promoting our own skin
care and broader beauty portfolio. It is important to ensure
all areas of the business are well-positioned to deliver near-
term contributions as well as long-term opportunity. This
transaction allows Avon to realize immediate benefits while
continuing to strengthen our balance sheet. Liz Earle is the
perfect fit for Walgreens Boots Alliance where it already has a
strong presence in its retail stores.”
DETAILS:• Avon bought Liz Earle in 2010, during Andrea Jung’s
tenure as chief executive officer, and had operated it
as a standalone business.
• Avon Products Inc. sold the U.K.-based Liz Earle natural
skin-care brand to Walgreens Boots Alliance for about
140 million pounds, or $215.5 million at the then
current exchange.
• In 2014, Liz Earle represented approximately 1 percent
of Avon’s revenues translating into sales of about $88.5
million and adjusted profit of $7.3 million.
• Funds from the divestiture, an all-cash transaction, are
expected to be used for the redemption of $250 million
in 2.375 percent notes due to mature in March.
• The price of the transaction is subject to an adjustment
based on working capital.
• Cravath represented Avon in connection with
this transaction.
KK:
After years of deteriorating performance, this transaction allows
Avon to realize immediate benefits to their balance sheet. Liz
Earle on the other hand, gets out from under the troubled Avon
umbrella and sees immediate and substantial growth through
expanded distribution in the Walgreens/Boots doors.
SG:
This deal is perfectly synergistic and perfectly in line with both
firms’ focus on core initiatives. I have always been a personal
fan of the concept of retailers (distribution) owning a stake in
the brands they sell. After all, who knows more about shopper
preferences and controls the levers to drive sell through?
AVON SELLS LIZ EARLE
TO WALGREENS

WHAT:Luxola was launched in Singapore in 2011 and quickly grew
into an online destination for beauty products in Southeast
Asia; carrying over 4000 products and 250 brands of which
65 are exclusive across multiple markets. Luxola serves
customers across the region including Australia, India, and the
UAE. The Company is committed to providing outstanding
customer service and bringing the best brands from around
the world, under one platform. Luxola provides ‘how-to’ advice
and a review platform for each product, providing the power
to hear from others with similar skin tones and types.
WHY:“Beauty is very personal. For me, beauty is confidence in
knowing who you are and stepping outside of yourself to
explore your unusual. When I moved to Singapore in 2008,
I found it challenging to find beauty products beyond
shopping mall counters, which is brand specific. I wanted
an unbiased and honest place for me to purchase and try
beauty products – from skincare to makeup and fragrances.
Luxola was born out of the need to give the power back to
the consumer.” - Alexis Horowitz-Burdick, Founder CEO
DETAILS:• LVMH has acquired Singapore-based e-commerce
platform, Luxola for an undisclosed sum.
• The acquisition came after Luxola raised over $15 million
in four rounds of funding, the last being a $3 million
round in May 2014 from FH Fund Management and
QueensBridge Venture Partners.
• According to Tech In Asia, Luxola’s revenue for 2013 to
2014 financial period was in the area of S$2.6 million
(US$2 million). The startup held about S$11.8 million
(US$8.75 million) in current assets, which could be a
mixture of cash reserves and unsold inventory. Finally, the
same data places Luxola’s valuation at the time of its
series C investment in May 2014 at US$28 million or more.
• LVMH will leverage Luxola to penetrate and accelerate
Sephora’s online growth in Southeast Asia.
• The acquisition is also said to aid in the crackdown of
the sale of counterfeit goods in the region, which
accounts for 20% of China’s cosmetics market.
• Luxola has 120 staff in 12 markets in South-east Asia,
Australia, the United Arab Emirates and India.
KK:
Luxola is currently active in 12 countries across Southeast Asia,
Australia and India with a strong brand name. The strategic
investment gives LVMH a readymade e-commerce solution
in the region with an established user base. Sephora has
a strong presence in Asia but it is primarily through brick
and mortar but this acquisition provides a springboard to
penetrate the online beauty market.
SG:
World domination one channel, one brand, one retailer
at a time. It’s the LVMH mission and they’re so good at it.
Building on its strength in beauty both on the retailer and
brand side, what better way to grow to dominance than to
buy? Ka-ching.
LVMH ACQUIRES ASIAN
BEAUTY START-UP
LUXOLA

WHAT:Founded in 1990 in Red Deer, Alberta, Canada Chatters is the
largest retailer of professional hair care products in Canada
and one of the largest hair salon operations in the country
with over 100 stores across eight provinces. The company’s
salons double as retail shops, carrying over 5,500 SKUs
across hair care, styling tools, cosmetics and more catering
to on-trend young and middle-age adults.
WHY:Chatters’ full-service approach, retailing beauty products and
providing services is timely for the current beauty landscape,
as specialized haircare and grooming franchise are a growth
business. In Canada, the market is less evolved than the US,
where niche concepts like Dry Bar have found success. ONCAP
was attracted to Chatters’ differentiated operating model
with superior unit economics; market leading position with a
strong brand in a growing and recession resistant industry;
diversity by location, SKU, product/service category and
supplier; and strong cash flow characteristics. ONCAP, in
partnership with the Chatters management team, aims to
create value through organic growth, new store openings
and tuck-in acquisition opportunities within Chatters’ various
market segments. Said Mark MacTavish, managing director
of ONCAP, “Chatters is well positioned to build upon its strong
foundation, and we’re excited to support its growth.
DETAILS:• Chatters Canada, the largest retailer of professional hair
care products in Canada and one of the largest hair salon
operators in the country was acquired in July 2015 in a
management buyout led by ONCAP.
• Terms of the transaction were not disclosed.
• ONCAP invests in small and mid-sized companies that
operate within industry niches and have strong
management teams with the potential to become
more profitable.
• Chatter was advised by Intrepid Investment Bankers,
a leading consumer investment firm with expertise in
beauty and personal care markets.
KK:
Hair salons are a proven franchise model, and ONCAP
provides the fuel needed for expansion in a market with
plenty of opportunities.
SG:
In a market with room to grow, Canadian-based Chatters is
poised to assume a leadership position in the beauty space
similar to how Ulta has emerged in the US.
CHATTERS HAIR CARE
ACQUIRED BY ONCAP

WHAT:Yihaodian was founded in July 2008 with an aim to establish
an online supermarket that provides customers with quality
products and an excellent customer experience. Yihaodian
currently offers more than 8,000,000 products, covering
14 product lines including Personal Care, with products
including L’Oreal, Borghese, Olay, and others.
WHY:Walmart previously held 51% of Yihaodian and acquired the
remaining shares from Ping An of China, the first financial
investor in the Company, and co-founders, Gang Yu and
Junling Liu. Walmart plans to invest in both accelerating
e-commerce and creating a seamless experience for
customers across online, mobile and stores. The Chinese
e-commerce market has huge potential for global retailers
such as Walmart. Total online retail spending in China was
projected at $307 billion in 2013, and Forrester Research has
estimated it should exceed $1 trillion by 2019. “Yihaodian
has excelled as one of China’s top e-commerce businesses.
We’re excited about the team at Yihaodian and their strong
local e-commerce experience,” said Neil Ashe, president and
CEO of Walmart Global eCommerce. “This local experience,
combined with Walmart’s global sourcing and our strong
local retail presence and supply chain will allow us to deliver
low prices on the products customers need in new and
exciting ways. Our investment in Yihaodian is part of our
long-term commitment to grow in China, and we look
forward to continuing to play a positive role in the development
of the e-commerce industry. The two co-founders announced
earlier this month that they are leaving Yihaodian, and
will continue to serve as Chairman Emeritus and Strategic
Executive Advisor respectively to ensure a smooth transition.
DETAILS:• Yihaodian currently offers more than 8,000,000
products, covering 14 product lines including Personal
Care, with products including L’Oreal, Borghese, Olay,
and others.
• In May 2011, Walmart first invested in Yihaodian to
integrate its logistics to Yihaodian’s supply chain.
• In 2012, Walmart announced an additional investment
in Yihaodian under the approval of Chinese Ministry
of Commerce, which made Walmart the biggest
shareholder of Yihaodian (51.3% of shares).
• In July 2015, Walmart announced full ownership
of Yihaodian.
• Financial terms of the transaction were not disclosed.
• The two co-founders announced that they are leaving
Yihaodian, but will continue to serve as Chairman
Emeritus and Strategic Executive Advisor respectively
during the transition period.
• Yihaodian will continue operating under its existing
name and will maintain its focus on having strong local
leadership with a clear understanding of the needs of
online consumers in China.
• Wang Lu will lead Yihaodian, and brings extensive
experience in the digital space in China, having been
responsible for managing CBS Interactive in China and
serving as the Senior Vice President and head of China
at CNET Networks.
KK:
I guess this is what a pivot looks like from one of the largest
retailers in the world shifting the focus from brick and mortar to
e-commerce in China. The fact that the Paul Mitchell brand
has distribution in 5000 salons and DeJoria intends to take
a hands-on advisory role could give this app a competitive
edge over the others in the category.
SG:
Who says Wal-Mart doesn’t
have a growth strategy?
WALMART ACQUIRES
CHINESE PERSONAL CARE
ETAILER YIHAODIAN

WHAT:Founded in 1901, Steiner Leisure is a global provider of spa
services, medi-spa services, a manufacturer and distributor
of premium skin, body and hair care products and an
accredited educator teaching students the skills necessary
to be a spa professional, including massage, skincare and
spa management. Product brands include Bliss, Elemis, Jou,
La Thérapie, Mandara and Steiner skincare, wellness and
haircare products. These are distributed through Steiner-
operated day spas, resorts and spas-at-sea. Elemis is also
distributed to over 1200 third party spas, and both Bliss and
Elemis are distributed via retail outlets all over the world.
Steiner Education Group operates schools at 17 campuses
located in Arizona, Colorado, Connecticut, Florida, Maryland,
Nevada, Pennsylvania, Utah and Virginia.
WHY:The acquisition adds a substantial collection of high growth
retail and personal care brands to Catterton’s already
impressive consumer portfolio. This transaction will provide
Steiner Leisure with greater flexibility to focus on our long-
term business initiatives and to improve our role as a global
provider and innovator in beauty, wellness and education.
DETAILS:• Spa company Steiner Leisure Ltd. has agreed to sell itself
to consumer-focused private-equity firm Catterton for
about $834 million.
• The offer of $65 a share is a 15% premium to Steiner’s
closing price of $56.53 a share on Thursday. Including
debt, the deal is valued at $925 million.
• The deal is expected to close near the end of the year or
early next year.
• The merger agreement includes a go-shop period, under
which Steiner can solicit other offers until Oct. 6.
• As a result of the transaction, Steiner Leisure will go private
and no longer trade on the NASDAQ.
• Jefferies LLC is serving as financial advisor to Steiner
Leisure’s Special Committee, and Dechert LLP is serving
as legal advisor to Steiner Leisure’s Special Committee.
• Kirkland Ellis LLP is serving as legal advisor to Catterton.
• Fidelity Management Research Co and Diamond
Hill Capital Management Inc are Steiner’s largest
shareholders with stakes of about 12.7 percent and 10
percent, respectively, as of June 30, according to Thomson
Reuters data.
• Chairman Clive Warshaw, Steiner’s largest individual
investor, stands to make more than $50 million from
the deal. He had a stake of about 5.9 percent in the
company as of April 15.
KK:
A big transition of one entity that consists of multiple brands,
categories and distribution channels. It will be interesting to see
what’s next for Steiner.
SG:
This is a big one. Leonard Fluxman has been the captain of
the Steiner ship through many voyages, and this latest one is
no surprise to me.
CATTERTON PARTNERS
TAKES STEINER
LEISURE PRIVATE

WHAT:Founded in 2008, Dr. Organic is a UK-based personal care
Company utilizing only the finest natural and organic raw
materials wherever possible. The Company sources and
uses a wide variety of accredited and certified organic
ingredients from around the World. Wherever an organic
ingredient cannot be used, a sustainable natural or naturally
derived alternative is used.
WHY:The Dr. Organic brand was first sold exclusively at NBTY’s
Holland Barrett retail chain in the UK, experienced
rapid success and was brought to the U.S. in 2013 under
the Organic Doctor name. In the U.S., Organic Doctor
is sold exclusively through NBTY’s Vitamin World retail
division, where the brand has been equally well-received
by consumers. The beauty and personal care industry
is a multi-billion dollar market that represents a natural
extension for NBTY given its position as a leader in the
wellness industry. “We are extremely enthusiastic about the
strategic acquisition of Dr. Organic. We have a tremendous
opportunity to expand our health and wellness portfolio
and to broaden the distribution of these highly-regarded
products. We believe the acquisition will allow us to
accelerate NBTY’s entry into the mass-market beauty and
skincare category particularly in the U.S., an area which we
believe can be an important growth engine for our business,
as evidenced by the success of our Nature’s Bounty Optimal
Solutions product line,” said NBTY President CEO Steve
Cahillane. “Our partnership with NBTY’s retail division has
proven to be the perfect fit for the Dr. Organic brand,” said
Dr. Organic co-owners Fred Whitcomb and Steve Quinn.
DETAILS:• NBTY, Inc is purchasing the Company for 55 million
pounds, or around $86 million, according to Bloomberg.
• The deal is subject to customary closing conditions, and
is expected to close later this year.
• Terms of the transaction were undisclosed.
• NBTY is a portfolio company of The Carlyle Group.
• Latham Watkins LLP acted as legal advisor to NBTY.
• Dorsey Whitney LLP acted as legal advisor to Dr. Organic.
KK:
Beauty and personal care is a natural extension for NBTY,
and Dr. Organics provides the perfect first step with its
natural organic positioning.
SG:
This is another great example of leveraging retail distribution
to build equity value through branded assets. And, the
timing is terrific for natural and organic based personal care
products. Taking the brand into other retail channels will
only drive growth more substantially.
NBTY ACQUIRES
DR. ORGANIC

WHAT:CS is New Zealand’s largest independent importer and
multi-brand distributor of cosmetics, fragrances and toiletry
brands. CS Company applies its 35+ years of in-depth local
market knowledge and experience – an unrivaled nationwide
sales network – and cutting-edge distribution systems. CS
represents luxury fragrance brands including Marc Jacobs,
Calvin Klein, Dolce Gabbana and Gucci, and cosmetics
and beauty brands including Max Factor, Natio and OPI.
Based in Mangere, near Auckland Airport, the company has
impressive warehousing and distribution facilities, and a staff
of 56, which includes national sales coverage.
WHY:Trilogy International manufactures and distributes
specialty natural skin care and home fragrance products
through three brands: Trilogy, ECOYA and Goodness in
New Zealand and around the world. The acquisition of
CS Company provides a substantial top and bottom line
growth contribution to the business, along with sales and
distribution resources, expected to positively impact
Trilogy’s share price.
DETAILS:• Trilogy International has acquired CS Company Limited.
• CS is forecast to achieve revenue of $41 million and
EBITDA earnings of $6.4 million for the full year ended
31 March 2016.
• The deal was worth $37 million, made up of an up-
front cash payment of $34 million, plus two deferred
payments of $1.5m on the first and second anniversary
of the acquisition. In addition, earn out payments will
be paid on the third anniversary of the acquisition on
achievement of certain profitability thresholds for the 31
March 2016 and 31 March 2017 financial years.
• CS will operate as stand-alone entity, and existing
management will report to a subcommittee of the
Trilogy Board led by Stephen Sinclair.
• Current CS owners CEO Ken Millar, COO/CFO Ray
Guilford and senior executive Dianne Reynolds, will
remain in the business.
• Trilogy CEO Angela Buglass will maintain responsibility
for the Trilogy, Ecoya and Goodness Brands.
• The acquisition is expected to impact positively Trilogy’s
share price and double the group’s revenue.
KK:
The beauty market in New Zealand is growing and CS
represents global beauty brands solid, expansion strategies.
CS compliments the Trilogy portfolio creates scale and a
platform for future growth.
SG:
Ken Millar is the only name in beauty distribution in New
Zealand, and while the market is small, it’s an important
one. This synergistic deal multiplies the impact both firms
have while providing a revenue boon to move the needle on
the stock and here’s the proof: from the date the deal was
announced to today, the stock is up 17%.
TRILOGY ACQUIRES
CS COMPANY

M&A 2015 Overview

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (20)

En vedette

En vedette (20)

Similaire à M&A 2015 Overview

Similaire à M&A 2015 Overview (20)

Dernier

Dernier (20)

M&A 2015 Overview