Lion pays €300m for good hair day(2)

Montagu Private Equity has made 3x on the sale of ghd – maker of flat irons and hair dryers – to Lion Capital.

Ghd sells
hair styling
irons through
hair salons 
globally. 

London-headquartered Lion Capital has acquired ghd from Montagu Private Equity. 

Financial details were undisclosed, but a source close to the matter valued the deal at £300 million. Financing was provided by Lloyds, according to a statement.

Lion could not immediately be reached for comment.

Ghd, which is an abbreviation for ‘Good Hair Day’, sells hair style appliances, such as hair dryers and hair straighteners, through more than 50,000 hair salons throughout Europe, Australia, South Africa, and the US. 

Montagu, which acquired the business in 2007 for £160 million, made a 3x return. Under Montagu’s ownership, the company doubled its profits, according to the statement. It also developed an e-commerce site which currently generates over one-third of the company’s profits and invested in research and development. In addition, ghd appointed pop singer Katy Perry as a global brand ambassador, according to a spokesperson. 

It is unknown whether an official auction process was held, but according to a separate source, ghd attracted “significant interest from strategic buyers and financial investors”. 

Lion bought ghd using its €1.5 billion Fund III, which reached its final close at the beginning of this year, according to sources familiar with the matter. The fund, a 2010 vintage, had an original target of €2 billion.  

Fund III has made several investments so far. In October 2010, it invested in Picard, a French frozen food business. Two months later it invested in Bumble Bee Foods, a US-based consumer packaged food business. In May 2011, Lion invested in fashion retailer AllSaints and in John Varvatos, another clothing business, in April 2012. Last July, Lion acquired Alain Affelou, a French eyewear retailer. 

The firm has recently been in the news given links its portfolio company Findus has had to the UK’s horsemeat scandal.