MCoBeauty parent DBG Health has sold a minority stake to a private equity investor in a deal that could set the company on a path to become a listed entity.
DBG sold about 25 per cent of its stake to a private capital fund run by BDT & MSD Partners for $1.6 billion, the Australian Financial Review reported.
The deal values the business at more than $7 billion and raises the personal wealth of its founder and chairman Dennis Bastas from nearly $3 billion to approximately $5 billion.
The sale will also allow DBG to access up to $1 billion of additional capital for future acquisitions, making this one of the largest private, founder-led transactions in Australian business.
Bastas will continue to own the remaining 75 per cent of the company. He told the AFR that he plans to keep the business private for now, but expects it to eventually become a listed company.
According to the chairman, DBG will use the $1 billion add-on investment to pursue international acquisition opportunities starting next year. The company will target brands that would benefit from the scale and platform created with MCo and Nude by Nature, as well as existing partnerships with retail partners.
“This is a 10-year horizon investment for me and BDT. I wanted to find an organisation that respected the way we do business and the commitment that I have to a plan, and we have a five-year plan,” Bastas told the AFR.
“The moment I decide that I’m happy to be a minority shareholder … that my job is done as the executive chairman, then I will look for the exit strategy very likely to be an IPO here in Australia,” he added.
DBG Health owns the country’s largest generic drug manufacturer, Arrotex, and the health and wellness division, VidaCorp, which includes MCoBeauty, Nude By Nature and Poni.
MCoBeauty products are currently available in Woolworths’ cosmetics aisle, as well as more than 2000 Target and Kroger stores in the US and the Superdrug chain in the UK. Bastas acquired the remaining half of MCoBeauty from Shelly Sullivan earlier this year.
