Brask to raise £5m for

Brask, the niche investment bank, is preparing a roadshow for the cosmetics manufacturer to attract European venture capital firms., a UK-based manufacturer of non-essential cosmetics, has appointed Brask & Company to help raise £5m in a private placement that will be open to European venture capital investors.

Contrary to what its name might suggest, has little to do with e-commerce. It uses the internet as part of an elaborate PR and marketing campaign, but 95 per cent of its sales are generated offline. The business currently has partnerships with over 100 international department stores including Selfridges in London to distribute more than 25 proprietary products that are produced in China.

According to Tor Svensson, co-founder and CFO, the company is cashflow positive and expected to generate £350,000 in sales by the end of the year. It projects up to £4m in revenue for 2002.

Svensson set up the company together with CEO Max Leykind, co-founder of Hard Candy, the US cosmetics firm that was sold to LVMH. The pair have invested £500,000 of their own money to launch the venture, i.e. half of the total that the firm has received to date. “The £5m we’re looking to raise now are needed purely in order to keep up with demand and produce more products. Given the urgency, we’re giving ourselves six months to raise the money”, Svensson said.

According to Lars-Christian Brask, chairman and CEO of Brask, the company will be valued at between £12m-£15m post fundraising. Brask is hoping to attract a syndicate of up to six venture capitalists to the deal. UK VCs are going to be approached first, but VCs in France, Germany and Scandinavia have also expressed interest, he said. “At first I wasn’t very excited about eyebeauty, but the more information we received, the stronger the proposition became. I now believe there will be Pokemon effect”, said Brask. 'This is going to work.'

Brask & Company was set up in 1999 as a boutique investment bank to assist companies with E2m-E50m private placements and offer European corporate clients, particularly venture capital and private equity firms, advice on M&A, financing and exit strategies.

Brask says its approach to doing business is opportunistic, particularly in the current market, although a focus on technology-related business remains. It is currently advising on private placements for clients in Germany and Denmark. In September, Brask helped arrange a three-way merger in the workwear market, when, a corporate clothing supplier, completed the acquisition of Westhill Clothing and made a successful bid for Specialist Clothing Plc.