Carlyle in $1bn cosmetics exit

The Carlyle Group has sold philosophy, a skincare and cosmetics company with expected revenues of $200 million in 2010, to beauty company Coty.

Financial terms were not disclosed, but a source close to the deal valued the transaction at just shy of $1 billion. The deal is expected to close in December 2010.

philosophy: Carlyle's $1bn exit

Carlyle acquired philosophy in March 2007 for an undisclosed sum. The philosophy product line is focused on skin care, fragrance, color cosmetics and bath and body, and is sold in retailers such as QVC, Sephora, Ulta and Nordstrom.

The sale marks the second high-profile exit for Carlyle this week, following Monday’s £450 million (€527 million; $717 million) sale of children’s car seat manufacturer Britax Childcare to Stockholm-based Nordic Capital. Carlyle purchased Britax in 2005 for £230 million, investing from its second European buyout fund that closed on £1.5 billion in 2005. The deal has earned the firm an exit multiple of between 2.5x and 3x.

As of 31 March, Carlyle European Partners II had an IRR of 19.8 percent and a return multiple of 1.4x, according to performance data from The California Public Employees’ Retirement System.