HIG commits to €65m debt facility for cosmetic company

HIG Whitehorse has backed Switzerland-based private equity firm Capvis’s purchase of a majority stake in the beauty products business Gotha Comsetics by backing a €65 million unitranche facility arranged by Credit Suisse.

Gotha, established in 2005 and headquartered in Italy, provides beauty products to both multi-national beauty brands and companies at the lower end of the market. Shawn Sedaghat, who founded the company and serves as chief executive, remains a major shareholder in the business.

The funds were committed from the firm’s third loan fund and it is the first transaction completed after Appu Mundassery assumed the role of head of direct lending in Europe at the firm. HIG Whitehorse invests in private debt on both sides of the Atlantic and provides a number of instruments, including unitranche, senior and subordinated debt. The size of transactions range between €10 million and €75 million and focus on companies generating €40 million or more in revenue per annum.

“This transaction demonstrates our ability to support high-quality business with bespoke, flexible and committed financing solutions in a timely manner. We continue to regard Italy as a key market and see more opportunities in the fund,” Mundassery said.

HIG did not reveal how much the firm contributed to the facility and Mundassery was not available for further comment before press time.

“After the dynamic growth of Gotha in recent years, the production capacity needs to be significantly expanded in the near future,” Sedaghat said.

Capvis acquired the stake using funds from its fourth private equity fund, which holds a total of €720 million of total commitments from investors. The latest transaction is the private equity firm’s third investment in Northern Italy.

“The business model of Gotha has impressed us. Capvis will support Gotha in the development of its structures and make the company a leader in the world’s rapidly growing niche market of colour cosmetics,” said Giovanni Revoltella, an investment director at Capvis.