Target Information

Amethis Europe Expansion has made a significant minority investment in HB Aesthetics, a European player in the cosmetics industry, through a primary leveraged buyout (LBO). This investment was made alongside the company’s president and founder, Raphaël Chauchard-Rios. Established in 2014, HB Aesthetics specializes in designing and distributing high-end dermocosmetic products primarily targeted at professional customers like dermatologists, clinics, beauty institutes, and spas.

Located in Vilafant, at the heart of Spain's cosmetic valley, HB Aesthetics boasts a robust internal R&D structure, manufacturing capabilities, and a training center. The company offers products under two main brands: Fusion Meso, which features a complete range of sterile serums for use with various devices (including micro-needling and ultrasounds), sold exclusively to aesthetic professionals; and Ekseption, focusing on products based on natural organic acids aimed at restoring the skin's natural pH.

Industry Overview

The cosmetics industry in Spain has experienced significant growth, driven by innovation and consumer demand for quality products. With a robust manufacturing base and a focus on R&D, Spain has become a prominent player in the European cosmetics market, particularly in the field of dermocosmetics. The growing awareness of skincare and wellness, coupled with the rising disposable incomes in emerging markets, has further accelerated the demand for specialized products.

As international markets evolve, the cosmetic industry in Spain faces increased competition from global players. However, the unique positioning of local brands that emphasize high-quality ingredients and sustainability aligns well with current consumer preferences. This trend provides opportunities for Spanish companies like HB Aesthetics to capitalize on their specialized offerings and enhance their market share.

Moreover, with the global shift towards e-commerce and digital marketing, Spanish cosmetic brands are increasingly adopting innovative marketing strategies to reach wider audiences. This is particularly relevant as the beauty and wellness sectors continue to converge, blending traditional and modern approaches to product distribution.

In addition, the COVID-19 pandemic has highlighted the importance of skincare and wellness, leading to a surge in interest in dermocosmetic products. The ongoing recovery of the global economy is believed to benefit the cosmetics sector, with expectations of steady growth in both domestic and international markets.

Rationale Behind the Deal

The investment from Amethis is aimed at accelerating HB Aesthetics' growth and expanding its international footprint, particularly in emerging markets in Africa and the Middle East. With over 95% of its revenue coming from exports, primarily in Southeast Asia, the Middle East, and Europe, the partnership with Amethis allows HB Aesthetics to leverage strategic and financial support to enhance its distribution channels.

In addition to geographical expansion, HB Aesthetics plans to construct a new manufacturing facility, significantly larger than the current one, to meet future demand. This expansion aligns with the company's commitment to produce high-quality products and improve operational efficiency.

Investor Information

Amethis is a growth capital fund manager founded by Luc Rigouzzo and Laurent Demey, focusing on investments in Africa and Europe. As a partner of Edmond de Rothschild Private Equity, Amethis manages close to $1 billion in assets and has completed over thirty investments. The firm aims to support promising mid-sized champions across diverse sectors by leveraging its extensive international network.

Amethis is recognized for its expertise in guiding companies through their growth phases, especially in the challenging environments of emerging markets. Its investment strategy emphasizes not only financial returns but also sustainable growth practices, which aligns well with HB Aesthetics' future objectives.

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Examining this investment, it appears that Amethis's partnership with HB Aesthetics could yield substantial returns given the strategic positioning and growth potential in the cosmetics market. The company's focus on dermocosmetics in conjunction with a strong international distribution strategy suggests a favorable outlook in the mid to long term.

The decision to enter high-growth markets, especially in Asia and the Middle East, where demand for aesthetic products is rising, demonstrates foresight. With ongoing commitments to innovation and sustainability, the company is well-placed to adapt to changing consumer preferences while growing its market share.

Furthermore, the planned construction of a new facility will enhance production capacity, allowing HB Aesthetics to meet increasing demand without compromising on quality. This is pivotal in an industry where brand reputation relies on product quality and efficacy.

Overall, this investment by Amethis may prove to be a prudent move, positioning both investors and the company for substantial growth in a competitive and lucrative market.

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