A “Harmonious” Symphony
Invested Banker to the Consumer Industry
Description
TARGET: Conair Professional Liquids Division (“Professional Liquids”)
OWNER/PARENT: Conair Corporation (“Conair”)
TRANSACTION TYPE: Corporate Carve-Out
COUNTERPARTY: Transom Capital Group
SEGMENT: Health & Wellness (Professional Hair Care)
TRANSACTION VALUE: Undisclosed
CLOSING DATE: June 28, 2019
ROLE: Exclusive Financial Advisor

Founded in 1959, Conair is a global consumer products company with leading market positions in personal care, grooming, health and beauty, and culinary appliances. As part of an ongoing strategic review of its portfolio, Conair determined in 2018 that its Professional Liquids business (“Professional Liquids” or “the Business”) was a non-core division, and that Conair’s resources would be better directed towards its core strengths in culinary and personal care appliances. Conair retained Sawaya Partners, LLC (“Sawaya Partners”) as its exclusive financial advisor in connection with the divestiture of the Business.

Led by John Costanza, a 32 year veteran in the professional hair care industry, the Business includes the highly-recognized haircare brands Rusk, Aquage, and One ‘n Only in addition to a well-regarded private label and contract manufacturing business. The Business manufactures most of it own products in a high-quality, 273,000 square feet manufacturing and distribution facility located in Rantoul, Illinois. Professional Liquids markets a wide range of hair care products including shampoos and conditioners, color, priming, styling and finishing products. Its customers include leading professional beauty supply retailers and distributors, independent salons, international distributors, as well as global private label and contract manufacturing customers.

“The Sawaya Partners team provided incredible support to me and my team each step of the way through this transaction. Their relentless focus and their ability to overcome the inevitable challenges involved in a complex carve-out speaks volumes about their capabilities. I couldn’t have asked for a better partner to help craft my vision for the opportunity with the Professional Liquids business.”

JOHN COSTANZA, CEO, CONAIR PROFESSIONAL LIQUIDS DBA BEAUTY QUEST GROUP

Conair-Transom Background

Over its 60-year history, Conair successfully implemented a strategy of buying and building a leading global portfolio of iconic brands. The Company had not divested any asset of scale in more than thirty years. Given the highly integrated nature of Conair’s business units, Conair recognized that the contemplated carve-out would require a high degree of collaboration between its financial advisor and multiple functional departments within the company to orchestrate the divestiture.

Sawaya Partners developed a strong working relationship with Conair’s Professional Liquids and Corporate leadership teams spanning Business, Finance, Human Resources, Legal, and Information Technology, among other disciplines. Together, a detailed plan was developed to market the Professional Liquids opportunity to potential acquirors that encompassed the performance and prospects of the Business, as well as detailed standalone cost estimates for both personnel and non-personnel related activities across Sales, Marketing & Education and General & Administrative functions. In total, a new acquiror would need to transition more than 255 employees and, in the case of a new platform investor, make additional hires to stand-up General & Administrative activities post-Closing.

Conair-Transom Objective

Carve-out transactions require a significantly higher level of preparation and analyses than the sale of a stand-alone business. Sawaya Partners has a demonstrated track record of successfully advising global corporations on carve-out transactions. Our clients have included Johnson & Johnson, Bayer, Royal Dutch Shell and Beiersdorf among others. This expertise proved invaluable in the development of marketing materials, standalone economics, as well as assumptions for post-Closing transition services. Based on this extensive track record, Sawaya Partners’ was able to clearly articulate the opportunity to a wide range of potential acquirors. The well-documented assumptions of the standalone cost structure was viewed with high credibility by potential acquirors.

Conair-Transom Process

Transom Capital distinguished itself as the preferred buyer for Professional Liquids due its expertise in the Professional Hair Care category through its ownership of Gene Juarez Salons & Spas and its track record in executing carve-out transactions. Transom Capital also distinguished itself by forming a strong relationship during the process with John Costanza who is the CEO for the new platform, renamed Beauty Quest Group. For the Professional Liquids team, Transom Capital represented an enthusiastic new owner with the resources and strategic vision to invest and grow the Professional Liquids business.

“Professional Liquids represents a very attractive investment opportunity for us. With the right focus and attention, this diverse portfolio provides so many opportunities for a new era of growth. During the critical phases of the process, Sawaya Partners played an invaluable role in advising and preparing the Professional Liquids Management Team for a complex carve-out.”

JAMES OH, PARTNER, TRANSOM CAPITAL GROUP

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