| Industry: |
Personal Care Products |
| Investment date: |
December 2004 |
| Acquired by: |
Onex Partners I |
| Investment: |
$115 million /
$27 million from Onex |
| Status: |
Realized |
| Head office: |
Holmdel, New Jersey |
| Website: |
www.cosmeticessence.com |
At the time of the acquisition by Onex Partners I, Cosmetic Essence, Inc. ("CEI") was a leading provider of outsourced supply chain management services to the personal care products industry, including research and development, manufacturing, filling, packaging and distribution. The company manufactures products such as fragrances, crèmes, lotions and colour cosmetics for a diversified customer base of leading branded manufacturers and major retailers. CEI’s fully integrated outsourcing model presents a strong value proposition to customers, enabling them to increase their speed to market, focus on their core strengths and reduce cost structures.
At the end of 2008, CEI was in violation of certain of its debt covenants. In 2009, CEI discussed a restructuring of its debt with its lenders but was unable to reach an agreement. Therefore, in early May 2009, Onex contributed its ownership in CEI's securities to an entity controlled by CEI's lenders, who agreed to provide additional liquidity to CEI. At that time, Onex and Onex Partners I ceased to have an equity ownership in the business. Onex' and Onex Partners I's original December 2004 investment in CEI was $138 million, of which Onex' portion was $32 million. As a result of previously recorded losses of CEI, Onex' investment in the company had a negative carrying value of $20 million. Therefore, Onex recorded a non-cash accounting gain of $20 million in the second quarter of 2009 arising from the disposition of its ownership interest in CEI.