In 2004, TSG partnered with the founder of PureOlogy in a majority recapitalization that included a modest amount of leverage to enable investment in growth initiatives.
The founder of PureOlogy had created a unique and proprietary formula for shampoo and conditioning products that preserved the life of color in color-treated hair. The company’s products were primarily distributed in a limited number of premium professional hair salons.
Over the course of TSG’s ownership and partnership with the founder and based on the real differentiated benefits that the company’s products offered consumers, PureOlogy dramatically increased margins by increasing the price of their products while expanded distribution not only into a nationwide network of premium professional salons but also into certain mid-price salons and upscale chains. The company also introduced shampoo and conditioner lines for specific hair types and innovative styling aid products to enable it to market a complete line of haircare products to its salon customers.
When TSG exited its investment through a strategic sale to L’Oreal in 2007, PureOlogy’s sales had increased by approximately 5 times versus the year prior to TSG’s investment while profit margins had almost doubled.