Deal of the Year, Large Market, 2016: Charlesbank Capital


  • Company: FullBeauty Brands
  • Lenders: Goldman Sachs, lead arranger of debt financing for acquisition and three dividend  recaps
  • Legal advisor: Goodwin Procter
  • Financial adviser: J.P. Morgan Chase and Jefferies ran dual-track sale and IPO process
  • Accountant:  PWC


  • Deal generated 10.2x gross return  in less than three years
  • Gross IRR of 255 percent
  • Bought business for 6x EBITDA; sold it for 10.3x EBITDA
  • Doubled EBITDA to $173.2 mln from $86.5 mln
  • EBITDA margins increased to 17.7 percent from 10.7 percent


Charlesbank Capital Partners spotted potential that others missed in the company that would become FullBeauty Brands.

At the time, the specialist in plus-sized clothing carried the name and its parent was PPR, known more for its stable of higher profile brands such as Gucci, Alexander McQueen and Puma. (PPR changed its name to Kering in 2013).

Charlesbank, working with minority investor Webster Capital, stepped up with confidence partly because of its experience in carve-outs such as Blacksmith Brands from Johnson & Johnson.

While niche apparel and direct marketing didn’t draw much excitement from others in the buyout space, Charlesbank took a contrarian view partly because of expertise in those areas.

The deal team included Charlesbank Managing Directors Andrew Janower, Josh Klevens and Tim Palmer, Vice President Alex Weiss and Principal Joshua Beer, as well as Webster Capital founder Don Steiner. The team recognized an opportunity to tap into a neglected demographic.

“This sector of the market is one that has not been very well served,” Klevens said in an interview. “Part of our thesis was this was one of the few companies focused on the apparel needs of plus-sized women and men and doing a good job of serving them. There is a cultural revolution going on where people are realizing that plus-sized men and women should be able to shop and wear clothes that make them look good and that’s been driving organic growth over the last few years.”

Teaming up again with Webster Capital as a minority investor, Charlesbank won a competitive auction for in a deal that valued the company at $525 million. Charlesbank closed the acquisition in February of 2013 at a purchase price multiple of 6x EBITDA, less than many other buyouts at the time.

Industry vet recruited as CEO

When Charlesbank and Webster Capital started putting a board of directors together for their new purchase, they turned to Paul Tarvin, a veteran of the direct-to-consumer business who had worked with Webster’s Steiner on the launch of Cornerstone Brands, now a division of HSN Inc.

Tarvin first agreed to be an outside director at of the company, then threw his hat into the ring to be CEO. At the helm, Tarvin promoted a greater emphasis on customer service, hired new brand managers and renamed the company. The FullBeauty name came from an existing lingerie-only business line.

Meanwhile, Charlesbank invested heavily in the company’s e-commerce platform by creating a new position of chief digital officer and adding additional e-commerce team members.

“We solidified the transition from a stagnant catalog company to a growing multi-channel retailer with an elevated shopping experience and a leading portfolio of brands,” said Weiss. “Catalog marketing and phone sales remain critical drivers of the business, but e-commerce has become an increasingly important part of it.”

In its only add-on acquisition, FullBeauty acquired Swimsuits For All in late 2014 and grew its sales to $43 million from $28 million in its first year of ownership.

Among its operational improvements, Full Beauty shifted to more of a direct-to-factory model on sourcing, which boosted product quality and profitability. It also negotiated more beneficial agreements with FedEx, its private label credit card and its print media suppliers.

The improvements allowed Charlesbank to complete three dividend recapitalizations with banker Goldman Sachs, returning 3.5x on its investment in its first 25 months of ownership.

In a boost to the FullBeauty brand later in Charlesbank’s ownership, the company signed as a spokeswoman pop singer Meghan Trainor, whose song “All About That Bass” celebrates full-figured women.

Eyeing an exit for FullBeauty, Charlesbank hired J.P. Morgan Chase and Jefferies to run a dual-track process of a sale and an initial public offering. It opted for a sale to Apax Partners for nearly $1.8 billion, closing the deal in October for a gross return of 10.2x in about 32 months. That made FullBeauty one of the top performers in the firm’s 18-year history. It reinvested 2.2x of that gain back into FullBeauty and remains a minority holder in the company.

“We’ve made a ton of progress but there’s way more room to run, which is why we wanted to stay invested in the company,” Klevens said. “Along with the operational transformation, there were some good tailwinds in the core markets. We recruited a terrific CEO who invested in the talent of the senior management team. The management team had great execution and the capital markets were favorable.”