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Englewood Lab to Add Makeup Manufacturing After Minority Investment From Nihon Kolmar

The business will also share technology from its new investor.

Nihon Kolmar has made a minority investment in Englewood Lab that will kick off the manufacturer’s move into color cosmetics.

Englewood, headquartered in Englewood, N.J., makes primarily skin-care and sun-care products for more than 100 beauty companies. The business has been privately owned for the past 12 years, but took on the Nihon Kolmar investment as part of its growth plan, according to chief executive officer David Chung.

The Nihon Kolmar deal comes a few months after Englewood Lab went public in Korea. The company could double in size by the end of 2018 as it expands into color, according to industry sources, who estimated the business does about $70 million in annual sales.

There are two parts to the deal, Chung explained — Nihon Kolmar is taking a roughly 10 percent stake in the business and will share its technology with Englewood, which also has scientists in South Korea working on formulations.

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“As an example, if Japan has interesting technologies or formulations — if we’d be interested in them, we’d transfer the technology, the formulas and know-how into Englewood Cliffs, and manufacture it here,” Chung said.

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That information sharing could also benefit American companies who were manufacturing products in Japan manufacture those same products in the U.S., he said.

Englewood has a history of bringing overseas innovations into the U.S. market — the lab was among the first to launch BB Creams here, has developed cushion compacts for years and makes the Internet-famous black peel-off mask, according to Chung. Right now he said the company specializes in SPF products and both peel off and sheet masks.

“We are going into the color business with powders, mascaras and lip care,” Chung said. “In those areas, we want to be number one in this category in the U.S. To become number one, we felt the most important [thing] is the innovation,” which the lab will be getting an extra dose of from Nihon Kolmar. He added that things like marbled lipsticks are likely coming, as well as technology that can be incorporated into products that aims to help prevent damage from the blue light emitted from computer and cell phone screens.

Englewood has recently added more space, including a 150,000-square-foot facility for manufacturing, innovation, packaging and distribution, plus a 22,000-square-foot expansion to the corporate headquarters. In Korea, the business operates the Englewood Lab Korea Innovation Center, which serves as a product-development arm. Further expansion for Englewood is likely, Chung noted.

The lab’s move into color cosmetics comes as the category expands — it grew 13 percent for 2015, according to the NPD Group. The growth in prestige cosmetics in particular has been a driver of M&A activity in the past few years. In January, Main Post Partners said it had made an investment in Milk Makeup; in November, Estée Lauder agreed to pay $1.45 billion for Too Faced, and in June, Shiseido agreed to buy Laura Mercier.