Eurazeo sold a majority stake in fragrance company Nest New York to an investor group led by North Castle Partners in a deal valuing the company at roughly $200 million.

WHO: Nest New York was founded in 2008 by fragrance authority Laura Slatkin. Initially launched as a home fragrance brand, the business has expanded its category offerings across categories to transform into a lifestyle brand that integrates aromatherapy and wellness into its product development. The brand's products are sold through a growing network of beauty specialty stores, luxury department stores, boutiques and spas, and the brand's online hub.

Eurazeo is a leading global listed investment company based in Paris and New York with a diversified portfolio. The firm covers a broad spectrum of private equity strategies through its five business divisions Eurazeo Capital, Eurazeo Croissance, Eurazeo PME, Eurazeo Patrimoine, and Eurazeo Brands. The current beauty portfolio includes Nest New York, Pat McGrath, Aroma-Zone, and Gisou.

North Castle Partners is a leading private equity firm focused on investments in consumer-driven product and service businesses that promote healthy, active, and sustainable living. North Castle is a hands-on, value-added investor in high-growth, middle-market companies. The current beauty and wellness portfolio includes well-known brands such as Glow Recipe and HydroMassage.

WHY: Under Eurazeo's management, Nest's leadership team accelerated product innovation, expanded brand awareness, and significantly increased the brand's digital penetration.

Under the new investment, the main focus will be international and category expansion, with Nest launching in the UK last year through Cult Beauty and recently making its debut in Selfridges. Elsewhere, it is gearing up to introduce the brand in Sephora Middle East before expanding further into Europe and moving into China, as well as having a deeper focus on wellness.

IN THEIR OWN WORDS: Laura Slatkin, Founder of Nest New York, said, "Since I founded Nest in 2008, I have been fortunate to have exceptional partners that have helped the brand solidify its position as one of the world's most trusted and highly regarded fragrance brands. I am deeply grateful for Eurazeo's partnership and expertise, which have enabled the business to flourish and deliver impressive growth over the past five years. As the brand embarks on its next chapter of growth, I look forward to partnering with North Castle and reuniting with Rich Gersten, whom I have had the pleasure of working with in the past."

Maria Dempsey, CEO of Nest New York, said, "Nest New York is a beloved fragrance lifestyle brand that has seen explosive growth over the past several years due to a laser-focus on product innovation, new customer acquisition, digital expansion and creative storytelling. This significant growth has been achieved with our exceptional team of professionals, strong retailer partnerships and a highly collaborative relationship with Eurazeo. We are thrilled to be working alongside the North Castle team on this next phase of growth."

Jill Granoff, Managing Partner of Eurazeo and CEO of Eurazeo's Brands Division said, "Laura, Maria and the Nest team have been exemplary partners, and together, we have built the Nest brand and driven tremendous value creation. We look forward to working with North Castle Partners on the next chapter of Nest's growth to leverage the Company's strong foundation and expand the business globally."

Hemanshu Patel, Partner at North Castle Partners, noted, "We're very excited to partner with Eurazeo and the management team at Nest and welcome the Company into North Castle's family of health and wellness focused brands that are leaders in their respective categories. It's an ideal situation for us with Rich Gersten, Beauty Industry Advisor at North Castle Partners, having worked with Laura and Nest in the past."

Rich Gersten added, "I have always been a huge fan of the brand and its potential, and it is exciting to partner with Nest once again at this inflection point to expand the brand's reach across categories and geographies."

DETAILS:

• An investor group led by North Castle Partners acquired a majority stake in Nest New York in a deal that valued the company at roughly $200 million.
• Following the close of this transaction, Eurazeo's invested equity capital will yield a return of approximately 2.7x.
• Eurazeo and Nest founder Laura Slatkin will retain minority stakes in the business. 
• North Castle does not plan to change the executive leadership team, with Maria Dempsey and founder Laura Slatkin remaining on as CEO and Executive Chairman, respectively.
• Brand sales tripled, direct-to-consumer sales increased tenfold, and EBITDA margins significantly expanded since 2017 when Eurazeo's Brands division launched with Nest as its debut investment.
• Perella Weinberg Partners LP acted as financial advisor to Nest.
• In December 2017, Tengram sold its majority stake in Nest New York for $70 million to Eurazeo in its first branded beauty deal. Founder and Executive Chairman Laura Slatkin also reinvested in the business as part of the deal.
• Tengram invested in Nest in 2012 when it purchased control of the company from its founder, Laura Slatkin.
• In October 2021, Glow Recipe took its first outside investment in a deal with private equity firm North Castle Partners for a minority stake in the business.