Apax Funds to sell LR

Funds advised by Apax Partners have reached an agreement to sell LR Health & Beauty Systems ('LR') to a consortium. The consortium consists of private equity firms Bregal Capital and Quadriga Capital. LR markets cosmetics, personal hygiene products, dietary supplements, perfumes and jewellery through the direct sales channel. The transaction is subject to approval by the relevant anti-trust authorities. The parties agreed not to disclose the sale price.

"LR Health & Beauty has a unique business model within the direct sales market. From the beginning the management-team, headed by Jens Abend, and the employees have demonstrated to us through their enthusiasm and dedication that LR is an exceptional company with high growth potential especially in foreign markets. We want to support the group and people working for it to realize that potential," says Andreas Fendel, founding partner of Quadriga Capital.

Florian Schick, Partner of Bregal Capital, comments: "LR is an innovative company with a superior value proposition to its sales partners and customers, and we are excited to support Jens Abend and his team in the continued internationalisation of the business."

Apax Funds bought into LR in November 2004, and then gradually acquired a majority share. In partnership with Apax, LR's management team revised the corporate strategy and professionalised its internal processes. They also drove the internationalisation of the business model forward and expanded the product range. LR now generates 52 per cent of its sales outside of Germany, predominantly in Western and Southern Europe. LR has been expanding in Russia, Kazakhstan, Albania, Bulgaria and Romania. Through collaborations with international stars like Bruce Willis, Heidi Klum, Michael Schumacher and Boris Becker new star products have been launched, especially in the perfume and cosmetics segment. During the period of the Apax Funds' investment, LR's sales rose from around EUR180 million (2004) to approximately EUR230 million (2011). Between 2004 and 2012 the number of sales partners increased from about 190,000 to about 300,000. The number of staff increased from circa 570 to around 1,000.

Apax has retail and consumer business expertise and a track record of investing in this sector. Over the past ten years, funds advised by Apax have invested approximately EUR5.2 billion in retail and consumer businesses. Current and historic notable investments in this sector include: Tommy Hilfiger, the global lifestyle brand; Advantage Sales & Marketing, the provider of outsourced sales and marketing services to consumer packaged goods companies and retailers in North America; Tnuva, a manufacturer and distributor of dietary and other food products in Israel; and Takko, a growing value fashion retailer in Europe.

About LR Health & Beauty Systems GmbH

LR Health & Beauty Systems GmbH, one of Germany's direct sales enterprises for body care and beauty products, is represented in 30 countries and with approx. 1,000 employees and around 300,000 independent sales partners. Its pillars of success include German quality products, a car plan, a professional training and service program for sales partners, a fair and transparent marketing plan as well as the cooperation with celebrities like Bruce Willis, Heidi Klum, Michael Schumacher, Boris Becker and Marcus Schenkenberg. LR is also a member of the following associations: Verband der Vertriebsfirmen Kosmetischer Erzeugnisse e.V. (VKE) [German cosmetics distributors and marketing association], Bundesverband deutscher Industrie- und Handelsunternehmen fur Arzneimittel, Reformwaren, Nahrungserganzungsmittel und Korperpflegemittel e.V. (BDIH), [Association of German industrial and trading firms for pharmaceuticals, health care products, food supplements and personal hygiene products], Bundesverband Direktvertrieb Deutschland e.V. (BDD) [German Association of Direct Sales] and the European Direct Selling Association (SELDIA).