NEW YORK — Boston-based investment group Summit Partners has acquired a majority stake in Physicians Formula, previously owned entirely by Pierre Fabre Inc.
This story first appeared in the November 14, 2003 issue of WWD. Subscribe Today.
Pierre Fabre Inc. will retain a minority interest in the cosmetics firm and will retain a seat on its board of directors. Summit Partners will have three seats. Dr. Craig D. Frances, principal, Walter G. Kortschak, managing partner and Sonya T. Brown, vice president of Summit Partners, have been named as the new directors.
Terms of the deal were not disclosed and the parties declined to provide further details on the ownership structure. The firms only said it was a “multimillion dollar investment.”
Physicians Formula has been growing at a brisk pace. According to Information Resources Inc., retail sales at midyear were up 34 percent to $40 million, excluding Wal-Mart. Since then the brand has also added Rite Aid to its list of customers.
Ingrid Jackel-Markens, senior vice president of marketing at Physicians Formula, said, “It is great news for us.” The partnership with Summit “will provide additional strategic and financial support for the brand.” Additionally, “Pierre Fabre will definitely continue to provide strategic support as they have in the past. They had such a faith and belief in the brand they wanted to stay involved with it.”
There are no changes in management planned, noted Jackel-Markens. With the new owner, Physicians Formula expects to be able to expand more rapidly. “We can further accelerate our growth and compete with other major corporations of this industry,” she said.
“We are very proud to be associated with Physicians Formula and its outstanding management team,” said Frances, in a statement. “We look forward to partnering with this extraordinary firm in its continued growth and future successes.”
Other companies financed by Summit Partners include Ameripath, Blue Ocean Software, B&W Loudspeakers and E-TEK Dynamics. Formed in 1984, Summit has provided support to more than 240 companies that have completed some 100 public offerings and 75 strategic sales or mergers.