Estée Lauder Buying Smashbox Cosmetics

TSG Consumer Partners has agreed to sell Smashbox Beauty Cosmetics Inc. to The Estée Lauder Companies Inc. (NYSE: EL). No financial terms were disclosed.


TSG Consumer Partners LLC (“TSG”), a private equity firm and leading investor in branded consumer companies, and Dean and Davis Factor, as owners of Smashbox Beauty Cosmetics Inc (“Smashbox”) announced that they have entered into a definitive agreement to sell Smashbox to The Estée Lauder Companies Inc. (NYSE:EL). The acquisition is expected to close in July 2010, subject to certain closing conditions, including regulatory approval.

Smashbox Beauty Cosmetics was founded in 1996 by Dean and Davis Factor, brothers and great-grandsons of cosmetic legend Max Factor. TSG Consumer Partners invested in the company in February 2006. Over the years, Smashbox has evolved into one of the leading cosmetics brands, with particularly strong performance in the specialty distribution channels. “We feel very fortunate to have had the opportunity to partner with Dean and Davis Factor, Budd Taylor, and the other members of the Smashbox management team. They have built a differentiated and powerful brand, and we view The Estée Lauder Companies as the ideal steward for the business going forward,” said Hadley Mullin, a Managing Director and Partner at TSG. “The Smashbox exit represents an exceptional return for TSG following a series of exceptional investments that more recently included PureOlogy, Smart Balance and VitaminWater.”

“TSG Consumer has been a tremendous partner over the past 4+ years. What distinguishes TSG Consumer Partners is that they are far more than a source of capital; they also provide substantial expertise and experience in the consumer sector, which helped accelerate our growth,” said Smashbox CEO and co-founder, Dean Factor. “Now that the brand is going to be in the very capable hands of The Estée Lauder Companies, we have no doubt that Smashbox and its very talented management team will continue to achieve new heights.”

The purchase price was not disclosed.

The seller was advised by Deutsche Bank and Ropes & Gray.

About TSG Consumer Partners

TSG Consumer Partners L.L.C. is the leading private equity firm in the U.S. focused exclusively on the consumer sector. TSG pioneered the use of private equity in high-growth, middle-market branded consumer companies. TSG was also the first institutional investment fund to focus on investing in natural and organic foods companies as well as companies focused on ethnic foods, functional food and beverage categories, and orphan brands in the personal care and household sectors. Along with its in-depth understanding of and experience within the consumer industry, TSG engages in a highly effective hands-on management approach that distinguishes the firm in attracting investments and building companies.