AEA set for major exit from natural cosmetics firm

The New York buyout firm in 2003 paid an estimated $180 million for an 80 percent stake in Burt’s Bees, a company Clorox has recently agreed to purchase for $925 million.

AEA Investors, the New York private equity firm founded in 1968 by the Rockefeller, Mellon, and Harriman families with S.G. Warburg & Co., is on track for a massive exit from its October 2003 investment in Burt’s Bees.

Burt's: Sweet exit

The private equity firm paid an estimated $180 million for an 80 percent stake in the natural cosmetics company, which is now to be sold in its entirety to food and chemical giant The Clorox Company in a $925 million transaction.

In the time it’s been owned by AEA, Burt’s Bees sales have nearly tripled. This year the company estimates its sales will hit $170 million, according to a statement.

The sale to Clorox is expected to complete by the end of 2007 and has already received regulatory approval. Lehman Brothers was financial advisor to The Clorox Company, while Goldman Sachs advised Burt's Bees.

AEA’s 14 investment professionals operate from offices in New York, London and Hong Kong and have more than $2.4 billion under management from its 50-some limited partners, whom it classifies as “the world's leading business executives, industrial families and influential institutional investors”. The firm typically invests in the industrial, specialty chemicals, consumer products and services sectors.

The firm also has a $600 million mezzanine fund, launched in 2005, that targets middle market companies, as well as a $285 million Small Business Fund, formed in 2004, that focusses on leveraged buyouts of small businesses in the US.