MILAN — Intercos has inked a deal with American private equity firm Catterton, which is acquiring a 43 percent stake in the Italian cosmetics supplier just over two months after it canceled a planned stock exchange debut.
Until now, Intercos founder and president Dario Ferrari has held a 99.5 percent stake in his company, with the remainder belonging to other company executives. Following the deal with Catterton, he will retain a roughly 56.5 percent stake and continue leading the company.
Sales projections this year for Intercos — known for its high-tech and fashionable lipstick, eye shadow, mascara, foundation, powder, pencils, nail polish and skin-care products — are about 350 million euros, or $436 million at current exchange.
Referring to Catterton as a “fantastic” partner, Ferrari told WWD that given his interest in further expansion in the U.S. — specifically on the West Coast, which he described as “a hotbed of creativity” — working with an American private equity firm made great sense.
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“We’re also keen on acquisitions,” Ferrari said, explaining that’s both in the U.S. and in Asia. Specifically, he cited great potential for additional growth in Korea, where Intercos currently has a product-innovation center and where attention to skin care is high.
Ferrari stressed that over the past decade, Intercos has established a solid presence in Brazil and China, and an “extremely flexible” operations network. To date, the company has seven research centers, 12 production plants and 11 marketing offices spread across four continents.
“Our business is very complex to manage,” he said, citing the different technologies used to produce makeup, nail polish and skin creams, plus the varying demands of international clients, who run the gamut from mass market to prestige brands. “Innovation is our weapon of choice, but we have to be even more global and even more rapid” to remain a market leader in the future, Ferrari said.
This fall has been a wild ride for Intercos. Set for a debut on the Italian stock exchange on Oct. 15, the company beat a hasty retreat Oct. 9 after market conditions deteriorated.
Rothschild, which advised Intercos for the initial public offering, is also on board for the Catterton deal. UBS has acted as Intercos’ financial adviser.
“Unfortunately, we were unlucky — those were terrible weeks on the [stock] market,” Ferrari said, adding: “It just wasn’t acceptable. I absolutely wasn’t willing to give away the company.”
Intercos had also flirted with an IPO in 2006, but then, as now, the plans were shelved.
“The disappointment of not entering the stock market was great,” Ferrari admitted.
Still, he expressed satisfaction with the interest many investors had expressed in his company. Catterton was an especially persistent suitor, and as soon as Intercos backed away from a listing on the Italian bourse, the firm stepped forward to discuss alternatives.
Greenwich, Conn.-based Catterton is a private equity firm focused on consumer products. It counts Cover FX and StriVectin as current holdings, and Frédéric Fekkai as a past investment.
J. Michael Chu, cofounder and managing partner of Catterton, said, “We were attracted to Intercos because of its scale as a manufacturer and supplier to the cosmetics industry. The company has a long history of performance and success.”
Chu listed Intercos’ capabilities in the areas of “product innovation and product development, the heartbeat of the industry, as well as the ability to scale and the leadership of Dario Ferrari” as factors it considered. Chu also highlighted the Italian firm’s global platform as a key underpinning to its success.
In addition to Catterton’s history as a consumer growth investor and its operating capabilities, Chu believes that its own global footprint and network can add value to that of Intercos to grow the company further.