HgCapital Sells Sanctuary Spa

HgCapital has sold The Sanctuary Spa Group, a female body care brand in the UK, to PZ Cussons for Gbp75 million. Close Brothers Corporate Finance advised HgCapital on the transaction.




HgCapital, the European sector-focused private equity investor, announces the sale of The Sanctuary Spa Group to PZ Cussons, the consumer products group, for Gbp75 million.  This is the seventh transaction by HgCapital since August 2007.


The Sanctuary Spa is the leading female body care brand in the UK.  The company also operates The Sanctuary Spa in Covent Garden, which serves over 64,000 guests per annum.  Since acquiring the products business in 2005, The Sanctuary Spa management team has grown the brand dramatically, with the introduction of new product lines and successful expansion into international markets, particularly the US and the Far East.  The company experienced strong trading over the key Christmas period.  For the period September 1st to December 31st 2007, retail sales increased by 11%.


Richard Mathews, Head of Consumer and Leisure at HgCapital, commented:

“This is another example of HgCapital investing in a strong brand and a great management team. Alice and her team have done a fantastic job of building this much-loved brand into a household name, growing the business through the introduction of new product categories and successfully expanding internationally.  The Sanctuary Spa has excellent prospects for further growth and we wish everyone at the company well for the future.


The successful sale of The Sanctuary Spa demonstrates the effectiveness of HgCapital's strategy of deep sector focus and active partnership with our portfolio businesses. This, together with our high levels of resourcing, can deliver strong returns throughout the whole economic cycle.”


Since April 2007, HgCapital has made five acquisitions, as well as eight sales of portfolio companies to private equity and trade buyers yielding 3.0x original cost and an IRR of approximately 50%.


Alice Avis, Chief Executive of The Sanctuary Spa commented:

“We are delighted with how the business has developed and grown in recent years.  The iconic spa in Covent Garden underpins our brand authority and has enabled us to develop the products business into one of the UK's leading body care brands.  We have also expanded the business into international markets, with particular success in the US, where sales grew by eighty per cent over the Christmas period.  Despite more challenging consumer trading conditions, we had another successful Christmas, with sales increasing by over ten per cent.  PZ Cussons has an excellent reputation in the industry and we look forward to working with them to develop The Sanctuary Spa further, both in the UK and internationally.”


Close Brothers Corporate Finance Limited is acting as the sole financial advisor to HgCapital in relation to the transaction.