Onex Gets Made Up With Purchase From Brockway –

Brockway Moran & Partners Inc. has signed an agreement to sell BMP/CEI Holdings Inc., the parent of Cosmetic Essence Inc. (CEI), to Onex Partners LP in a transaction valued at $245 million. The transaction will result in a more than 5.5x return on investment for Brockway Moran. The deal is expected to close in the fourth quarter of 2004.

Cosmetic Essence Inc. was advised by Harris Williams on the sale.

Cosmetic Essence, headquartered in Holmdel, N.J., provides outsourced formulating, manufacturing, filling, packaging and distribution services to the cosmetics and health and beauty care industry. The company manufactures fragrances, creams, lotions and color cosmetics and generates revenue in excess of $200 million.

“We recapped CE in March 2001, and since that time we have had four add-on acquisitions that helped expand what we were able to offer to our customers. During that time CE has more than doubled in size from a revenue perspective and increased its EBITDA by 3x,” said Richard Wandoff, a managing director with Brockway Moran.

In July 2001, CE purchased a manufacturing plant located in Roanoke, Va., from Unilever and signed an agreement to fulfill Elizabeth Arden’s cream, lotion and fragrance needs. In August 2002, CE bought another cosmetic group, which expanded its presence in the color cosmetics (lip sticks, eye shadows, etc.) arena. In November 2002, CE purchased MHI, Inc., a secondary packaging business, and in January 2003, the company acquired Kid Care, which put CE into juvenile bath products, like Shrek and Scooby Doo soaps and bubble baths.

“We just felt it was time to exit. The bank markets are there and there’s plenty of capital chasing the deals so the timing was really good and we accomplished many of the goals we had laid out. This company is now poised for that next phase of growth,” said Wandoff.

Brockway Moran ran a competitive process through Harris Williams, which began in May.

“Onex did a good job throughout the process. They did a lot of work upfront and gave us a lot of confidence,” said Michael Moran, a managing partner with Brockway Moran. “The whole management team also stays on with Onex, which is important.”

Onex Partners LP is a C$2.2 billion private equity fund established by Onex Corp. Onex Partners provides capital for new Onex-sponsored acquisitions not related to Onex’ existing operating companies. Onex has committed C$525 million to Onex Partners. The acquisition of CEI would be the fourth transaction completed by Onex Partners this year.

Brockway Moran also expects to close the sale of Integrated Aerospace Inc. in the fourth quarter for $110 million to Smiths Group Plc.