Carlyle Group saw opportunity to invest in a men’s skin-care business even as work-from-home has scaled back grooming habits.
The firm early this month agreed to buy a majority stake in Every Man Jack following an almost all-virtual process. Carlyle did meet in-person with founder Ritch Viola, who will remain the second-largest shareholder in the business, according to a source close to the deal.
“This [Every Man Jack] was something we were tracking since the start of the year,” said RJ David, who as a principal at Carlyle focuses on consumer, media & retail. “Covid put a pause in the process but we remained engaged.” The deal is yet to close.
Lifestyle changes clearly impacted the industry and Carlyle spotted that: “Some categories like deodorant were hit harder than the others,” David said.
Even so, the investment thesis was built around capitalizing on two existing trends that were sustained even during the pandemic: Increased engagement by male consumers in the personal care space and the importance of natural ingredients.
“Clean beauty has existed in the women space, but we think there’s an opportunity to own own the clean grooming market for men,” David said.
Based in Corte Madera, California, the company promises to use as many naturally-derived and plant-based ingredients in its products as possible. The products also claim to be gluten-free, cruelty-free and vegan.
At least one consumer- and personal care-focused banker agrees. “Five years ago, all-natural brands were in obscure sections of the retailers, you had to go to the specialty section,” Shahriar Attaie of FocalPoint Partners said. “But we’ve seen a shift in awareness; people care about what they put on their body.”
Attaie previously worked at Intrepid, the investment bank that advised Every Man Jack on its sale process. Attaie’s related engagements in the space have included advising Native – an organically grown, natural deodorant brand – on its sale to P&G.
“I think there’s a demand for brands that are in the masstige channels and routine-based skincare category,” Attaie added. Masstige refers to luxury brands but for the masses, “a downward shift from prestige and luxury,” the banker said.
Every Man Jack’s sales channels and founder-owned status also added to its attraction.
Founded by Ritch Viola in 2007, a majority of the business is brick-and-mortar and sells at retailers like Walmart, Target, Whole Foods and others. “Their distribution base is all the essential retailers,” David said.
“If you are in Target, there’s a benefit; a lot of specialty beauty stores were deemed non-essential, but these distribution channels saw traffic,” Attaie said.
While financial terms of Carlyle’s investment in Every Man Jack weren’t disclosed, Attie said a large majority of deals in the space have traded hands at around 1.5x to 2.5x revenue.
According to Carlyle’s David, sales grew about 40 percent this year.
The Washington, D.C., PE group also appointed three veterans of renowned brands to the company’s board: John Replogle and Pete Alberse, formerly from Seventh Generation and Burt’s Bees, and Sharon MacLeod, most recently the global vice president of Dove Men+Care.
Noting these additions, one source said, “it looks like they are setting up an infrastructure to sell it to a big strategic, ultimately.”
Looking ahead, the private equity group plans to increase investment in marketing. “It has very low awareness; our intention would be to amplify the brand,” David added.
Carlyle also sees an opportunity to grow its e-commerce business and expand the brand internationally. “Given our footprint we’ve got some feet on the street and an understanding of what distributions look like there [in other regions].”
Updated: This report has been updated to clarify certain comments made by David.