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Germany's LR Health & Beauty Systems Sold to Equity Firms

Posted: January 2, 2013

Funds advised by Apax Partners reached an agreement to sell Germany-based beauty company LR Health & Beauty Systems to a consortium. The consortium consists of private equity firms Bregal Capital and Quadriga Capital. LR is a growing company that markets cosmetics, personal hygiene products, dietary supplements, perfumes and jewelry through the direct sales channel. The new shareholders will support LR Group in expanding its national and international activities. The transaction is subject to approval by the relevant anti-trust authorities, and the parties agreed not to disclose the sale price.

One of Germany's leading direct sales enterprises for body care and beauty products, LR is represented in 30 countries and with approximately 1,000 employees and around 300,000 independent sales partners. For its products, it has partnered with celebrities such as Bruce Willis, Heidi Klum, Michael Schumacher, Boris Becker and Marcus Schenkenberg.

"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, commented, "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 internationalization 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 professionalized its internal processes. They also drove the internationalization of the business model forward and expanded the product range. LR now generates 52% of its sales outside of Germany, predominantly in Western and Southern Europe. LR has been expanding in Russia, Kazakhstan, Albania, Bulgaria and Romania. During the period of the Apax Funds' investment, LR's sales rose from around €180 million (2004) to approximately €230 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.