“SFEP is an ideal partner for SV Labs, given the firm’s successful track record partnering with natural beauty and personal care brands, coupled with its experience building specialty manufacturing businesses in high-growth consumer categories,” says Jeff Slaboden, President of SV Labs in this week’s press release about the acquisition.
SFEP invests in consumer companies, especially beauty
San Francisco Equity Partners (SFEP) invests in what it calls “growth-oriented companies in the consumer sector.” And according to the firm’s site, that means companies with up to $100m in revenue and as much as $10m EBITDA (earnings before interest, taxes, depreciation, and amortization). SFEP makes equity investments between $10 and $30m and takes on both controlling investments as well as minority investments.
The deal with SV Labs appears to be one of the firms’ first B2B business investments. But SFEP has notable experience in the cosmetics and personal care industry—and has doubled down on beauty in recent months, adding several experienced cosmetics and personal care industry executives to the firm’s roster of operating partners
Adding more beauty expertise to the SFEP team
In July of 2020, SFEP announced 8 new operating partners, 6 of whom specialize in beauty:
- Moiz Ali, Founder and former CEO of Native, the D2C deo brand he sold to P&G for $100m +.
- Maggie Carey, with significant experience at SC Johnson and Molson Coors, who as CEO of Yes To leads that personal care brand’s business for SFEP.
- Richard Conti, current CEO of Japonesque, a makeup and beauty tools brand in the SFEP portfolio.
- Jordan Lamberg, who has worked as Process Engineer at beauty packaging maker Kolmar Laboratories, in process engineering and quality assurance (QA) at Benefit Cosmetics, and now serves as VP of Operations for SFEP portfolio brand Jane Iredale.
- Michael Larrain, previously CEO of PCA Skin and President of L’Oreal’s Active Cosmetics Division.
- Chris Payne, currently CEO of Jane Iredale.
At the time, SFEP Managing Partner Scott Potter commented, “We believe leveraging operational talent in every aspect of the investment process has become even more critical to creating value in the current environment.”
“The expansion of our operating partner network,” he said, “is a key initiative for our platform and will add value to all areas of our investment process, from thesis development to deal sourcing and most importantly, to creating value through operational involvement with our partner companies.”
S&V Labs is now owned by SFEP
“We see great potential for nimble and innovative manufacturers like SV Labs to serve the unique needs of high-growth natural beauty and personal care brands,” says Potter in this week’s press release, explaining the firm’s motivation to acquire the contract manufacturer.
“SV Labs has a long and rich heritage and is well positioned to continue to scale as a manufacturing partner of choice to leading natural brands,” he says. “We look forward to supporting the Company with operational and strategic support during its next phase of growth.”
SV Labs currently operates 2 facilities, both in Watsonville, California (between Santa Cruz and Salinas near Monterey Bay). The manufacturer’s team of some 450 people serves multinational, startup, and store brands with concept creation, R&D, packaging design, quality control, filling, labeling, fulfillment, etc.
And many of the beauty manufacturer’s practices are in line with current sustainability expectations. SV Labs “[offers] natural and organic product formulations that are biodegradable and petro-chemical free.” They also offer concentrated product formulas as well as packaging material options that include recycled, regrind, and compostables.