Bain backs Sundial Brands with Deval Patrick taking part in the deal

  • Boston firm takes minority stake in skin and hair products maker
  • Deal marks Sundial’s first institutional money
  • Former Massachusetts governor Deval Patrick joins Sundial board

Ryan Cotton, managing director at Bain Capital, said new product lines and a possible initial public offering down the road may be in the works for Sundial Brands, a natural skin and hair products manufacturer led by founder and CEO Richelieu Dennis.

Patrick, a high-profile hire by Bain Capital this past April, helped build the relationship between Bain Capital and Dennis, a self-made business owner who started out selling soap in New York City with backing from family and friends, Cotton said. Patrick was not made available for an interview with Buyouts.

Deval acted as my partner on the deal,” Cotton said. “His campaign for governor was a community grass roots effort and that’s how Richelieu Dennis built the business.”

Bain Capital’s undisclosed stake in Sundial Brands marked the company’s first institutional money in a deal handled by San Francisco investment bank Demeter Group. After the deal, Sundial remains majority family-owned and operated. Patrick joins the Sundial board as part of the deal.

Sundial says its products use natural, certified organic and ethically sourced ingredients. It promotes sustainable social and economic empowerment throughout its supply chain and communities in the United States and Africa. It focuses on entrepreneurship, women’s empowerment, education and wellness.

Sundial Brands’ CEO Dennis has been able to win market share from traditional brands through a focus on the rapidly growing “new general market” of multicultural consumers in the U.S., Cotton said.

“He made products targeted at needs instead of demographics, and progressive retailers saw a lift from new brands, and in customers willing to trade up,” he said.

Bain Capital is already familiar with positive social agendas at its portfolio companies such as Toms, a footwear maker that gives a pair of shoes to a child in need for each pair it sells, Cotton said.

Bain Capital sees overlap between cause-based marketing and Patrick’s background in politics and public service, including a social impact bond program that helped fund programs that fight juvenile incarceration and homelessness, Cotton said.

The next few months will bring more clarity on plans by Patrick to launch a possible fund focused on social investing, or some other platform, he added.

LPs interested in socially responsible investing have already been talking about Patrick’s intention to invest across a variety of asset classes, including private equity, venture capital, mezzanine, public markets and real estate.

Clarification: The headline on this story was changed to better reflect Deval Patrick’s role.