Freeman's Beauty Infusion masks

On the heels of its $1.4 billion sale of PDC, Yellow Wood Partners has inked its next deal — the acquisition of mass-market brand Freeman Beauty.

Freeman makes skin-care, hair-care, foot-care and specialty bath and body products under its Feeling Beautiful, Beauty Infusion, Psssst!, Bare Foot, C. Booth and Feeling Legendary lines. The paraben-, sulfate- and mineral oil-free products are sold in Ulta Beauty, Rite Aid, Nordstrom Rack, Bed Bath & Beyond, Safeway, Albertsons, Sally Beauty and other channels. The company’s products are mostly priced between $1.99 and $7.99.

Yellow Wood bought the company from Champlain Capital. Terms of the deal were not disclosed. Industry sources indicated the business is growing at about 25 percent annually.

One of the things that attracted Yellow Wood was Freeman’s focus in masks, said Yellow Wood managing partner Dana Schmaltz, who noted the category is quickly growing.

“We want to expand on their existing lines and the facial masks in particular,” Schmaltz said. “The category’s growing at [more than] 30 percent as masks become part of the daily beauty regimen of many women — and men.” Freeman’s mask for men is one of its best-selling products, Schmaltz noted.

To grow Freeman, Yellow Wood will look to introduce new products into the category, ramp up distribution and at add-on acquisitions, Schmaltz said. “We’re looking at other brands to add into it and build the business,” he said.

Freeman launched Beauty Infusion earlier in 2017 as a means to tap into a more sophisticated consumer — the Feeling Beautiful line has a young consumer base — with K-beauty inspired products.

“That [line] is really trying to bring in more consumers who may have used Freeman as an entry-point mask,” Schmaltz said. “The Beauty Infusion line is meant to keep that customer in the Freeman line with a different product line.”

Other lines have other focuses — Feeling Legendary, for example, is focused on men. Psssst! exists outside of the mask category, with a dry shampoo line that retails for $6.99, and C. Booth makes bath and body products.

Freeman is Yellow Wood’s first investment from its new $370 million fund, which closed in July. The firm plans to invest $50 million to $150 million per deal. Yellow Wood looks for companies in the consumer space that can be built up through organic growth and bolt-on acquisitions.

It’s a strategy the firm deployed for PDC (the parent of Dr. Teals, Eylure, Cantu and other brands), which it sold to CVC Capital Partners for $1.425 billion earlier in 2017 after making a series of acquisitions.  For 2016, PDC posted $430 million in sales, with $110 million in earnings before interest, taxes, depreciation and amortization.

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