Australian business BWX Ltd. is bumping up its global presence with a $38.4 million deal for natural beauty brand Mineral Fusion.
Mineral Fusion, headquartered in Petaluma, Calif., makes natural makeup, skin-care, hair-care and nail polish products sold in the natural grocery channel, as well as CVS and other stores. The business has more than 150 stockkeeping units that are sold in more than 3,000 North American doors.
Mineral Fusion has about $24 million in sales, with earnings before interest, taxes, depreciation and amortization expected to fall between $3 million and $4 million for 2017. The purchase price may include an additional $4.6 million earn out.
For BWX, which owns Sukin, Uspa, Edward Beale and Renew Skin Care, the purchase presents an opportunity to expand into North America, according to chief executive officer John Humble. BWX already has operations in Australia, New Zealand, the U.K. and Canada. Mineral Fusion’s management team, based in the U.S., will stay in place, he noted.
BWX focuses on the natural segment of the beauty and personal-care market, and posted 54 million Australian dollars in revenues for 2016.
“Our largest brand at the moment, which is Sukin, fits exactly into the distribution channels that Mineral Fusion sits in, in the U.S.,” Humble said. “With the inclusion of Mineral Fusion, we have a product offering that does far more than just face and body — we have cosmetics as well, which we can present internationally.” Sukin also sits in the natural channel, he noted.
“Everywhere we present Sukin is an opportunity to present Mineral Fusion and vice versa,” Humble added. He said he sees an opportunity for Mineral Fusion to become a $100 million brand in the next three to five years.
Mineral Fusion was sold by Greenwich, Conn., private equity firm North Castle Partners. The firm has made a handful of beauty investments, including Avalon Organics and currently backs Red Door spas and Palladio. North Castle is also an investor in Barry’s Bootcamp.
“Mineral Fusion grew from a single customer cosmetics brand into the leading natural brand of mineral-based personal-care products across multiple categories, including color cosmetics, body, skin care, nail care and hair care,” said North Castle managing director Jon Canarick. North Castle tapped Gil Pritchard, formerly chief executive officer of a different North Castle-backed business, Avalon Organics, to run the business.
The brand was one of several in the natural beauty space looking for investment. Andalou Naturals, Derma E, Kiss My Face and MyChelle Dermaceuticals are also looking for investors, industry sources have said.
Susan Roddy, the director at Houlihan Lokey who sold Mineral Fusion noted that the natural beauty and personal-care market is “exploding right now.”
“Consumers are increasingly educated about ingredients and recognize that what they put on their body is just as important as what they put in it,” Roddy said. “Brands and products that used to be considered ‘niche’ are now increasingly mainstream as [people] are paying closer attention to labels…Retailers like Target, CVS and Walgreens have woken up to this, and are quickly looking to add brands and offerings to fulfill shopper’s needs.”