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Apax Funds Reach Agreement To Sell LR To A Consortium

MUNICH, Dec. 23, 2012 /PRNewswire/ -- Funds advised by Apax Partners ('Apax Funds') have reached an agreement to sell LR Health & Beauty Systems ('LR') to a consortium. The consortium consists of private equity firms Bregal Capital and Quadriga Capital. LR is a strongly growing company, which markets cosmetics, personal hygiene products, dietary supplements, perfumes and jewellery through the direct sales channel. The new shareholders will support LR Group in expanding its national and international activities. The transaction is subject to approval by the relevant anti-trust authorities. The parties agreed not to disclose the sale price.

"LR Health & Beauty has a unique business model within the direct sales market. From the beginning the management-team, headed by Jens Abend, and the employees have demonstrated to us through their enthusiasm and dedication that LR is an exceptional company with high growth potential especially in foreign markets. We want to support the group and people working for it to realize that potential," says Andreas Fendel, founding partner of Quadriga Capital.

Florian Schick, Partner of Bregal Capital, comments: "LR is an innovative company with a superior value proposition to its sales partners and customers, and we are excited to support Jens Abend and his team in the continued internationalisation of the business."

Apax Funds bought into LR in November 2004, and then gradually acquired a majority share. In partnership with Apax, LR's management team revised the corporate strategy and professionalised its internal processes. They also drove the internationalisation of the business model forward and expanded the product range. LR now generates 52 per cent of its sales outside of Germany, predominantly in Western and Southern Europe. LR has been expanding in Russia, Kazakhstan, Albania, Bulgaria and Romania. Through collaborations with international stars like Bruce Willis, Heidi Klum, Michael Schumacher and Boris Becker new star products have been launched, especially in the perfume and cosmetics segment. During the period of the Apax Funds' investment, LR's sales rose from around €180 million (2004) to approximately €230 million (2011). Between 2004 and 2012 the number of sales partners increased from about 190,000 to about 300,000. The number of staff increased from circa 570 to around 1,000.

"The successful investment of Apax Funds in LR highlights the expertise of Apax Partners to identify attractive business models in our key industries and to develop them over the long-term. Together with CEO Jens Abend and his team, we have driven the professionalisation of LR, supported the company's sustainable growth, and enabled it to continue its international expansion. We are proud of having been a partner of LR and its management team over the past eight years," says Ralf Gruss, Partner and COO at Apax Partners.

"Since the investment of Apax Partners, LR has developed into a leading direct sales company in Europe. As market leader in Germany in its segment, LR has consistently and constantly grown in foreign markets. Apax believed in the strength and business model of our company right from the very beginning. The cooperation with Apax was exemplary. Now a new chapter in the LR story is beginning," says Jens Abend, CEO of LR.

Apax has deep retail and consumer business expertise and a successful track record of investing in this sector. Over the past ten years, funds advised by Apax have invested approximately €5.2 billion in retail and consumer businesses. Current and historic notable investments in this sector include: Tommy Hilfiger, the global lifestyle brand; Advantage Sales & Marketing, the leading provider of outsourced sales and marketing services to consumer packaged goods companies and retailers in North America; Tnuva, the largest manufacturer and distributor of dietary and other food products in Israel; and Takko, a fast growing value fashion retailer in Europe.

Apax was advised by UBS and Societe Generale.

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