Castanea buys Urban Decay in all-equity deal

The Boston-based mid-market firm financed the purchase of the trendy cosmetics line from its $575m third fund, which still has ample capacity for future investments. California-based Urban Decay is poised to expand into new markets.

Boston-based mid-market firm Castanea Partners has acquired Urban Decay Cosmetics from the Falic Group, with plans to expand the California cosmetics brand into new markets.

The size of the deal was not disclosed, although Castanea principal Andrew Collina confirmed it was an “all-equity” deal. The firm made the investment from its third buyout fund, which closed on $575 million in 2007 and targets companies with enterprise values of up to $250 million.

Urban Decay: ready
for expansion

Urban Decay was founded in 1996 and produces more than 300 cosmetic products. Executives Tim Warner and Wender Zomnir will continue in the roles as general manager and executive creative director respectively following Castanea’s acquisition.

Castanea also invested in fashion label Betsey Johnson from its third fund.

Only a small amount from the fund has been spent and the firm has no plans right now for any new fundraising, Collina said. “We still have a tremendous amount of funds to invest,” he said.

In addition to specialty retail, the firm – which was founded in 2001 by Brian Knez and former Neiman Marcus chief executive Robert Smith – also invests in publishing and information services, education, consumer brands and marketing services. It has previously invested in Hanna Andersson, a designer of children’s apparel and accessories.