Apax Funds reach agreement to sell LR to a consortium
22nd December 2012Apax Funds advised by Apax Partners ('Apax Funds') have reached an agreement to sell LR Health & Beauty Systems ('LR') to a consortium. The consortium consis
Funds advised by Apax Partners ('Apax Funds') have reached an agreement to sell LR Health & Beauty Systems ('LR') to a consortium. The consortium consists of private equity firms Bregal Capital and Quadriga Capital. LR is a strongly growing company, which markets cosmetics, personal hygiene products, dietary supplements, perfumes and jewellery through the direct sales channel.
Funds advised by Apax Partners ('Apax Funds') have reached an agreement to sell LR Health & Beauty Systems ('LR') to a consortium. The consortium consists of private equity firms Bregal Capital and Quadriga Capital. LR is a strongly growing company, which markets cosmetics, personal hygiene products, dietary supplements, perfumes and jewellery through the direct sales channel. The new shareholders will support LR Group in expanding its national and international activities. The transaction is subject to approval by the relevant anti-trust authorities. The parties agreed not to disclose the sale price.
"LR Health & Beauty has a unique business model within the direct sales market. From the beginning the management-team, headed by Jens Abend, and the employees have demonstrated us through their enthusiasm and dedication that LR is an exceptional company with high growth potential especially in foreign markets. We want to support the group and people working for it to realize that potential", says Andreas Fendel, founding partner of Quadriga Capital.
Florian Schick, Partner of Bregal Capital, comments: "LR is an innovative company with a superior value proposition to its sales partners and customers, and we are excited to support Jens Abend and his team in the continued internationalisation of the business."
Apax Funds bought into LR in November 2004, and then gradually acquired a majority share. In partnership with Apax, LR's management team revised the corporate strategy and professionalised its internal processes. They also drove the internationalisation of the business model forward and expanded the product range.LR now generates 52 per cent of its sales outside of Germany, predominantly in Western and Southern Europe. LR has been expanding in Russia, Kazakhstan, Albania, Bulgaria and Romania. Through collaborations with international stars like Bruce Willis, Heidi Klum, Michael Schumacher and Boris Becker new star products have been launched, especially in the perfume and cosmetics segment. During the period of the Apax Funds' investment, LR's sales rose from around €180m (2004) to approximately €230m (2011). Between 2004 and 2012 the number of sales partners increased from about 190,000 to about 300,000. The number of staff increased from circa 570 to around 1,000.
"The successful investment of Apax Funds in LR highlights the expertise of Apax Partners to identify attractive business models in our key industries and to develop them over the long-term. Together with CEO Jens Abend and his team, we have driven the professionalisation of LR, supported the company's sustainable growth, and enabled it to continue its international expansion. We are proud of having been a partner of LR and its management team over the past eight years", says Ralf Gruss, Partner and COO at Apax Partners.
"Since the investment of Apax Partners, LR has developed into a leading direct sales company in Europe. As market leader in Germany in its segment, LR has consistently and constantly grown in foreign markets. Apax believed in the strength and business model of our company right from the very beginning. The cooperation with Apax was exemplary. Now a new chapter in the LR story is beginning", says Jens Abend, CEO of LR.
Apax has deep retail and consumer business expertise and a successful track record of investing in this sector. Over the past ten years, funds advised by Apax have invested approximately €5.2bn in retail and consumer businesses. Current and historic notable investments in this sector include: Tommy Hilfiger, the global lifestyle brand; Advantage Sales & Marketing, the leading provider of outsourced sales and marketing services to consumer packaged goods companies and retailers in North America; Tnuva, the largest manufacturer and distributor of dietary and other food products in Israel; and Takko, a fast growing value fashion retailer in Europe.
Apax was advised by UBS and Société Générale.
About Apax Partners
Apax Partners is one of the world's leading private equity investment groups. It operates globally and has more than 30 years of investing experience. Funds under the advice of Apax Partners total over US$35 billion around the world. These Funds provide long-term equity financing to build and strengthen world-class companies. Funds advised by Apax Partners invest in companies across its global sectors of Tech & Telecom, Retail & Consumer, Media, Healthcare and Financial & Business Services. For further information about Apax, please visit: www.apax.com.
About LR Health & Beauty Systems GmbH
LR Health & Beauty Systems GmbH, one of Germany's leading direct sales enterprises for body care and beauty products, is represented in 30 countries and with approx. 1,000 employees and around 300,000 independent sales partners, LR is one of the leading global players in the industry. Its pillars of success include German quality products, a unique car plan, a professional training and service program for sales partners, a fair and transparent marketing plan as well as the cooperation with celebrities like Bruce Willis, Heidi Klum, Michael Schumacher, Boris Becker and Marcus Schenkenberg. LR is also a member of the following associations: Verband der Vertriebsfirmen Kosmetischer Erzeugnisse e.V. (VKE) [German cosmetics distributors and marketing association], Bundesverband deutscher Industrie- und Handelsunternehmen für Arzneimittel, Reformwaren, Nahrungsergänzungsmittel und Körperpflegemittel e.V. (BDIH), [Association of German industrial and trading firms for pharmaceuticals, health care products, food supplements and personal hygiene products], Bundesverband Direktvertrieb Deutschland e.V. (BDD) [German Association of Direct Sales] and the European Direct Selling Association (SELDIA). Further information at. For further information about LR Health and Beauty Systems, please visit: www.lrworld.com/en/.
About Quadriga Capital
Quadriga Capital is a leading investment firm in Germany and neighbouring countries that specializes in acquiring and supporting medium-sized companies that pursue long-term transformation and growth strategies. Investors in Quadriga Capital funds are international institutional investors, such as pension funds and insurance companies. Quadriga Capital's portfolio companies include among others AHT Austria Haustechnik GmbH in Austria, the Ameos Group in Zurich, Kinetics in Eschau/Bavaria, the Lapp Group in Stuttgart or the Ipsen Group in Kleve / North Rhine Westphalia.
About Bregal Capital
Bregal Capital is a private equity firm with fund commitments of more than €3 billion and has since inception invested in over 20 companies. Bregal Capital is currently investing from The Bregal Fund III L.P., a €1 billion fund, targeting middle market investments in buy out and development capital.
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