TSG Consumer Partners ("TSG") identified a market opportunity in the highly fragmented OTC health and beauty care market to acquire, consolidate and revitalize "orphan" consumer brands. As a result, in August 1996, TSG established a partnership with Medtech Labs, a manufacturer of such niche products as Compoz sleep-aid, New-Skin liquid bandages and Ezo denture cushions. The new entity, named Medtech Products, subsequently acquired 11 topical ointment and internal analgesic brands from American Home Products, including Compound W, Dermoplast, Momentum and Arthritis Pain Formula. The brands included some long-time leaders in their respective categories that were being neglected, as parent companies focused their efforts on higher profile global brands. In December 1996, the Medtech portfolio was augmented with the acquisition of Percogesic pain reliever from P&G. TSG and Medtech grew this portfolio of brands organically through stabilized distribution and strategic marketing, leading to sharply higher sales and margins. TSG also acquired the dominant domestic nail polish remover brand, Cutex, in December 1998. In March 2001, TSG consolidated its OTC and Personal Care brand holdings by merging them into Medtech Holdings and recruited an experienced OTC product management team led by Peter Mann, former President of the Americas Group at Block Drug, to manage the consolidated entity. In connection with the merger, the company was recapitalized, with $40 million in cash and stock distributed to investors, yielding an IRR in excess of 40 percent. The Medtech portfolio was rounded out in February 2002, with the acquisition of another AHP orphan brand, Denorex, a leading therapeutic dandruff shampoo. Medtech Holdings was sold in February 2004, having increased consolidated net sales and EBITDA by over 250 percent over seven years. It was sold at a price to EBITDA multiple that was double TSG's cost going in, yielding an IRR in excess of 32 percent. Copyright © 2008 TSG Consumer Partners. All Rights Reserved.