Consumer products-focussed VMG Equity Partners has made its second investment, a majority stake in mineral makeup company Colorescience for an undisclosed amount.
Colorescience is led by Diane Ranger, an early entrepreneur in the mineral makeup industry. In the late 1970s Ranger founded Bare Escentuals, one of the first companies to produce mineral makeup, which is purported to be healthier and more natural than other types of cosmetics.
Bare Escentuals did well initially, but by 1990 had accumulated a heavy debt burden and was sold to investor John Hansen, president of US private equity firm JH Partners, for $160,000 (€110,848) in a foreclosure. Berkshire Partners later invested in the company as well. In 2006, Bare Escentuals raised $352 million in its initial public offering on NASDAQ.
Ranger left the company after the foreclosure, but remained active in the industry, and in 2000 founded Colorescience. Unlike the more mass-market Bare Escentuals, Colorescience distributes its products solely through high-end spas, dermatologists and plastic surgeons. VMG plans to continue this strategy, said partner Dave Baram.
VMG will grow the company by building up its sales and marketing infrastructure, Baram said. Marketing is one of VMG’s most important value-adds: Baram is also an officer and director at Los Angeles talent agency The Firm, whose clients include Snoop Dogg and Justin Timberlake. VMG says it can leverage its relationship with The Firm to place its portfolio companies’ products with key trendsetters and tastemakers.
Actress Cameron Diaz, who is also represented by The Firm, is a “firm, passionate believer” in Colorescience products, Baram said.
VMG closed its debut fund on $325 million in July. The firm’s first investment was the acquisition, in partnership with US firm Capital Logic Partners, of bag and accessory maker Timbuk2 in October 2005, shortly after VMG was founded.