Mayfair Equity Partners “would love to invest in the beauty and personal care category again” following its sale of haircare brand Tangle Teezer, its co-founder and Partner Bertie Aykroyd said. The firm will continue to invest in such high-quality British consumer brands with strong potential for international expansion, leveraging its expertise to drive growth.

While it has been a challenging couple of years for the consumer sector, there are still many profitable and growing businesses in the sector, of which Tangle Teezer is a good example, Aykroyd said, adding that Mayfair is interested in asset-light businesses, especially those that have already demonstrated ability to expand outside the UK.

Mayfair has been gearing up for its third flagship fund, as previously reported by this news service.

The Exit

Mayfair sold Tangle Teezer last month for GBP 165m, to French producer of stationery, lighters and shavers BIC [EPA:BB], having seen its EBITDA approximately double over the last three years and its annual net sales exceed GBP 60m, Aykroyd said.

Emerging trends such as the “skinification” of hair —integrating skincare principles and products into haircare routines—are reshaping consumer habits and driving innovation in the market, he added.

On the back of this strong performance and inbound interest, Mayfair worked to be ready to deliver an earlier exit than first planned, he said. The sponsor always believed the business would attract significant strategic interest, particularly as the beauty category continues to experience a wave of M&A activity.

Working with financial advisor Harris Williams, Mayfair ran a less-structured process and spent close to a year finding the right home for the brand, he said. While most interest in the business was coming from the US, primarily from strategics, some private equity (PE) firms also expressed interest.

BIC, an expert in product design and innovation, recognized Tangle Teezer as a highly attractive and complementary acquisition that would allow it to enter an exciting new category, he said.

Investment and improvements 

During its ownership, Mayfair focused on supporting Tangle Teezer and its team in a growth journey centred on international expansion, with a particular emphasis on the US market, Aykroyd said.

Tangle Teezer was already selling in several dozen markets prior to the deal with Mayfair, and it was “that international level of success” that caught the PE firm’s eye, he said.

The company’s products are now sold in some 70 markets globally, and during Mayfair’s ownership its sales climbed from 15% to close to 50% in the US, where it has been working with retailers including CVS, Walmart [NYSE:WMT] and Amazon [NASDAQ:AMZN] he said.

Key to this was the sponsor’s support of Tangle Teezer’s management across different areas, in line with its active partnership model, through which functional specialists support portfolio companies with business-process improvement initiatives, he said.

Prior to Mayfair’s investment, the company was working with only one manufacturing partner in the UK and shipping product around the world from this manufacturer, Aykroyd said. It moved some of Tangle Teezer’s manufacturing to North America and China to serve Asia while maintaining the UK factory to support the European market.

This regional manufacturing strategy strengthened the company’s business model, contributed several million pounds of incremental EBITDA, and decreased the company’s carbon emissions, he said.

To optimise procurement, Tangle Teezer moved from operating warehouses for its stock to a third-party solution warehouse, he said.

With Mayfair’s support, the company also evolved its product innovation strategy, which resulted in it forming a global innovation advisory board. The board comprises a diverse set of experts and aims to encourage innovation for an increasingly diverse customer base, he said.

Developing a comprehensive ESG strategy has led to replacing plastic packaging with card packaging, which also decreased costs; and launch of a plant-based brush made primarily from sustainably sourced castor beans, he said.

In terms of marketing side, Mayfair accelerated Tangle Teezer’s brand building while overseeing recruitment of the company’s first chief marketing officer, he said.

Mayfair had a long-standing relationship with the firm’s founder, Shaun Pulfrey, before it acquired a majority stake in the business in July 2021, Aykroyd said, and Pulfrey remained a minority shareholder while Tangle Teezer was part of its portfolio.

The business generated GBP 30m in FY20, ahead of its Mayfair-backed MBO.