Key Takeaways
- • Ares Management LP has acquired DevaCurl (Deva Holdings Inc.) from Tengram Capital Partners, marking another significant private equity entry into the fast-growing beauty and personal care sector.
- • DevaCurl generated approximately $10 million in Ebitda in 2016 and is projected to produce nearly $20 million in Ebitda for 2017, reflecting strong operational momentum in the specialized hair-care category.
- • The acquisition was valued between $250 million and $300 million according to industry sources, reflecting the elevated Ebitda multiples (low-teens or higher) currently commanded by beauty and personal care assets.
- • Tengram Capital, which invested in DevaCurl in 2013, is exiting the investment after four years, demonstrating typical PE fund lifecycle and strong exit environments in the consumer beauty space.
- • The sale underscores institutional investor appetite for authentic, specialized hair-care brands targeting underserved consumer segments, particularly as consumers increasingly embrace natural hair textures and seek category-specific solutions.
Summary
Ares Management LP has agreed to acquire DevaCurl, a leading professional and prestige hair care brand specializing in curly, super-curly, and wavy hair products, from private equity sponsor Tengram Capital Partners. The transaction, announced May 18, 2017, reflects sustained institutional appetite for beauty and personal care assets at favorable valuations.
DevaCurl, founded in 1994 by Denis DaSilva and Lorraine Massey, has established a differentiated market position within the broader hair-care category through specialization in natural and textured hair solutions. The company achieved approximately $10 million in Ebitda during 2016 and is projected to generate nearly $20 million in Ebitda for 2017, demonstrating accelerating operational performance. Industry observers note that beauty and personal care companies currently command Ebitda multiples in the low-teens or higher range, positioning DevaCurl within a favorable valuation environment.
Tengram Capital, a consumer-focused private equity firm, initially backed the company in 2013 and is now executing an exit after a four-year hold period. The sale process moved quickly and attracted interest from both strategic and financial buyers, according to sources familiar with the transaction. Within the broader beauty landscape, the hair-care category has demonstrated particular strength as consumer preferences shift toward natural styling and demand for specialized, authentic brands increases. This contrasts with the color cosmetics segment, which has experienced relative slowdown during the same period.
Financial advisors Jefferies LLC and Financo LLC provided counsel to Ares and DevaCurl respectively, with legal representation from Morgan, Lewis & Bockius LLP and Morrison Cohen LLP. The transaction demonstrates sustained PE interest in consumer beauty, evidenced by comparable strategic acquisitions such as Unilever's December 2016 purchase of Living Proof Inc.
DevaCurl, founded in 1994 by Denis DaSilva and Lorraine Massey, has established a differentiated market position within the broader hair-care category through specialization in natural and textured hair solutions. The company achieved approximately $10 million in Ebitda during 2016 and is projected to generate nearly $20 million in Ebitda for 2017, demonstrating accelerating operational performance. Industry observers note that beauty and personal care companies currently command Ebitda multiples in the low-teens or higher range, positioning DevaCurl within a favorable valuation environment.
Tengram Capital, a consumer-focused private equity firm, initially backed the company in 2013 and is now executing an exit after a four-year hold period. The sale process moved quickly and attracted interest from both strategic and financial buyers, according to sources familiar with the transaction. Within the broader beauty landscape, the hair-care category has demonstrated particular strength as consumer preferences shift toward natural styling and demand for specialized, authentic brands increases. This contrasts with the color cosmetics segment, which has experienced relative slowdown during the same period.
Financial advisors Jefferies LLC and Financo LLC provided counsel to Ares and DevaCurl respectively, with legal representation from Morgan, Lewis & Bockius LLP and Morrison Cohen LLP. The transaction demonstrates sustained PE interest in consumer beauty, evidenced by comparable strategic acquisitions such as Unilever's December 2016 purchase of Living Proof Inc.
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