INDUSTRY BLOG

Private equity continues to flood into beauty care contract manufacturing with the latest announcement that Capvis Equity Partners acquired a majority stake in Gotha Cosmetics, a leading contract and private label manufacturer of color cosmetics, headquartered in Bergamo, Italy. Founded in 2005, Gotha Cosmetics develops cosmetic formulations, manufactures cosmetic products and provides filling and packaging solutions. The company serves as a strategic partner for both independent beauty brands as well as multi-national companies transitioning to outsourced production models. The acquisition was supported by a €65 million unitranche facility from H.I.G. WhiteHorse, a credit affiliate of global investment firm H.I.G. Capital.

Beauty care contract manufacturing has become an attractive investment target for private equity as brands are becoming more reliant on contract manufacturing partners for an increasing array of value-added services.

It is a way for private equity to play the attractive elements of both the growth and recession resistance of the beauty care industry without the risk of a single brand. The transaction is yet another example of the recent surge of private equity interest in the beauty care contract manufacturing sector, including deals from Taglich Private Equity, Frontenac, The Riverside Company, Nolan Capital, Thompson Street Capital and Kainos Capital all within the last year.

Sources: H.I.G. WhiteHorse press release, PitchBook, and GOTHA Cosmetics Website.