The Company

LORAC Cosmetics, LLC

A Los Angeles based, prestige beauty brand offering a full range of color cosmetics

The Challenge

This prestige category, color cosmetics company was purchased in late 2015 by a private equity group that planned to aggressively grow the top line revenue by introducing new products and strategies. Ultimately those strategies failed, revenues dropped significantly, and the brand was damaged in the market. With no path to restore the brand’s image, the secured lender stepped in and began to market the company to a limited number of groups. When those efforts proved unsuccessful, Equity Partners was retained to sell the company.

The Process

Equity Partners ran an extensive 30-day marketing process and quickly solicited and negotiated a stalking horse bid. The lender agreed to provide the stalking horse with certain protections and EP went back to the market for a short period of time to solicit overbids. One group qualified, and an auction was held among them and the stalking horse bidder.

The Solution

Through competition the bid doubled, and the company was sold to the competing bidder. Closing occurred two weeks after the auction, employees were retained, and vendors were able to continue working with the company, which was now properly capitalized and strategically better suited for success after being acquired by an industry player.