Simple
We backed a great management team at Simple (formerly Accantia), an excellent business which initially had two very strong brands that were competing for investment and attention. Over the course of our investment we disposed of one of the brands, concentrating on Simple which moved from being the number three to the number one female facial skin care brand in the UK¹. We redeveloped the business to become a focused sales and marketing-led operation and the Simple brand doubled market share during our ownership
The Acquisition
Accantia comprised principally of two major consumer goods brands, Simple and Lil-lets. Simple was a leading health and beauty brand in the UK specialising in sensitive skin, and Lil-lets was a major feminine hygiene brand. We acquired Accantia in a secondary buy-out from ABN Amro Capital in early 2004 for £229 million. Accantia was originally owned by Smith & Nephew.
Needing to act fast
Having identified Accantia as an attractive potential secondary buy out, we approached ABN Amro directly. From the start we worked with Operating Partner John Robinson, a former CEO of Smith & Nephew who knew Accantia well and had followed the careers of CEO Geoff Percy and FD Peter Hatherly closely.
One of the options available to ABN Amro Capital was to take money out through a recapitalisation. It was therefore vital that we could get the deal signed quickly. Thanks to John Robinson’s involvement, we were able to exchange within a tight timeframe, acquiring the company in a bilateral deal and avoiding an auction. John’s expertise also played a key role in helping us to feel comfortable about the sector and the business itself.
We worked closely with the Bank of Scotland to structure a highly attractive debt package, based largely on Accantia’s complementary mix of businesses.
Concentrating on growing the Simple brand
We soon realised there was moderate synergistic benefit in managing both brands and more to go for with the Simple brand. In December 2006, we disposed of the Lil-lets brand to Electra Partners in an £80 million deal to concentrate solely on the Simple brand. The strong product development and marketing skills of the Simple management team ensured the brand’s continued growth. With a strong heritage in soap and cleansing, the Simple brand gradually expanded into moisturisers, baby and shower products.
Under our ownership Simple’s net sales grew at 15 percent per year, to £61m in 2008. The introduction of a broad range of new products, helped increase the number of consumers by 50% in 2 years, to 5.5m. On exit, Simple was the number one female facial skincare brand in the UK¹.
At exit, Simple received significant interest from trade companies looking for a footprint in the UK value skincare category. We sold Simple to US beauty business, Alberto Culver, in December 2009 in a deal worth £240 million, completing the deal in under one week from final offers. The deal represented a 2.7x return on our original investment and we sold Simple for an impressive 11x 2009 EBITDA.
¹ IRI, by units sold