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Innovative Brands, LLC

Background:
Innovative Brands, LLC ("Innovative Brands" or the "Company") was formed by Najafi Companies, LLC ("Najafi") to acquire Pert Plus® and Sure® from Procter & Gamble Co. ("P&G") in July and September 2006, respectively. Najafi's strategy was to revitalize these iconic brands which remain well-known for their distinctive product efficacy traits, enjoy nearly ubiquitous distribution across all major retail classes of trade, and continue to rank among the top 5 brands in their respective categories in aided awareness.
 
The Sawaya Segalas team orchestrated a very successful sale process for Innovative Brands. We have known Fuad and his team for several years and knew from the outset that they were the best firm to handle the assignment on our behalf. Their expertise in the industry, knowledge of potential buyers, and ability to craft the Innovative Brands story were critical to the outcome we achieved. Throughout the process, they provided outstanding advice and their help with the contract negotiations was instrumental in getting the deal across the finish line.
My colleagues and I look forward to working with them in
the future.
JAHM NAJAFI
CHIEF EXECUTIVE OFFICER, NAJAFI COMPANIES
The acquisitions of Pert Plus and Sure are a terrific strategic fit for Idelle Labs. I can not say enough about our interaction with the team at Sawaya Segalas which understood our interest in the brands from the outset. They ran an extremely smooth due diligence process and were highly responsive to our needs at every stage along the way. As the negotiations unfolded, they were also proactive in addressing critical transition issues and were key figures in the final contract negotiations. Over the years, we have seen Sawaya Segalas in action on a number of occasions and this successful outcome is another example of their unparalleled expertise and leadership in consumer products M&A.
Jack Jancin
SENIOR VICE PRESIDENT, Idelle Labs, Division of Helen of Troy LTD
 
Key Milestones in Pert Plus®' History:
Iconic P&G Brand...Revitalized by Innovative Brands
 
Pert Plus® introduced the revolutionary 2-in-1 shampoo and conditioner ("2-in-1") technology to the consumer market in 1987 and today remains a leading brand in the 2-in-1 segment, which accounts for about one-fifth of the $2.0 billion U.S. shampoo market. Pert Plus®' distinctive identity is rooted in the inherent simplicity and convenience of its multi-functional products.
 
Pert Plus Milestones
 
(Click chart to enlarge)
 
Key Milestones in Sure®'s History:
A Storied Past and A Bright Future
 
Sure was introduced in 1970 by P&G and has been trusted for decades by consumers for its product efficacy, and unscented and lightly scented product offerings. Sure is currently among the leading value-priced brands in the $1.7 billion U.S. anti-perspirant/deodorant category.
 
Sure Milestones
 
(Click chart to enlarge)
 
Objective:
Immediately following the acquisition of Pert Plus® and Sure®, Innovative Brands implemented a multi-phase strategy to stabilize then rejuvenate the brands after many years outside P&G's spotlight. This effort consisted of successfully transitioning management and operations of the two brands away from P&G, implementing outsourced solutions for product supply and logistics, and stimulating consumer takeaway with fresh marketing initiatives and new product introductions. With this foundation in place, Najafi concluded that a new owner would be better positioned to lead the next chapter in the brands' revitalization and growth and began to evaluate potential strategic alternatives for the business.
 
Process Highlights:
Sawaya Segalas recognized from the outset that the key to the success of the transaction would be the positioning of Innovative Brands as a viable and sustainable entity in large, fragmented categories. Sawaya Segalas oriented potential buyers to the most enduring attributes of these iconic brands: high awareness levels (78% and 75% aided awareness for Pert Plus® and Sure®, respectively), deep retail penetration (81% and 96% ACV for Pert Plus® and Sure®, respectively), and powerful consumer loyalty. In addition, Innovative Brands' scale and highly-experienced Management team provided the foundation for a consumer products personal care platform. The Company's nimble business model married the best elements of outsourced product supply and logistics with in-house sales, marketing, finance and IT capabilities. Furthermore, the Company's infrastructure could be leveraged to pursue acquisitions in related categories that had the potential to double the size of Innovative Brands with minimal incremental overhead.
 
Strong Consumer Loyalty
% of Buyers Repeat Purchasing

Pert Plus - Strong Customer Loyalty
Market Share Stability
IRI - FDMx Market Share (%)

Sure - Market Share Stability
 
(Click either chart to enlarge)
 
A critical component of the sale process involved working with Management to demonstrate the stability of the brands, particularly as it related to consumer purchasing behavior. This was a point of emphasis for both strategic and financial buyers given the diminished advertising and promotion New Productssupport afforded the brands by P&G and the challenging retail environment existing in 2008 and 2009. The marketing materials provided a rigorous, data-driven assessment of the brands' stability, including the brands' consistent market share and ACV levels versus those exhibited in the later years of P&G ownership, their high levels of productivity for retailers, and their enduring brand awareness with consumers. Finally, Management had embarked on a series of new trade marketing programs and product innovations, supported by extensive consumer research, which created the vision for an exciting new phase of growth. In combination, all of these factors provided potential buyers with a series of defensible arguments for an investment in Innovative Brands.
 
Outcome:
In August 2009, Sawaya Segalas initiated a targeted auction process that included a carefully selected set of potential strategic buyers and a range of financial buyers with deep knowledge of the consumer products marketplace. Based on the indications of interest received after circulation of the Confidential Information Memorandum, a number of potential buyers were invited to attend an in-depth Management Presentation. Several strategic and financial buyers subsequently completed a full due diligence assessment of the business. On March 10, 2010, Helen of Troy Limited, a leading, publicly-traded, consumer products company with a market capitalization of more than $750 million, announced that it had signed a definitive agreement to acquire substantially all of the assets of Innovative Brands. Among interested parties, Helen of Troy was best able to realize the strategic benefits from the Pert Plus® and Sure® brands. Helen of Troy markets a diverse line of hair care products and styling accessories under a number of well-known brands and competes in the anti-perspirant/deodorant category with its Brut line of products. Over the years, Helen of Troy has successfully grown through the acquisition and integration of well-known, non-core brands and was confident that it could build on the reinvigoration of these two ex-P&G brands, having successfully acquired and integrated several brands from P&G and others, including Infusium in 2009. The transaction closed on March 31, 2010. Najafi was extremely pleased with the outcome, achieving price and contract terms that met its expectations, as well as a prompt closing. For Sawaya Segalas, the sale of Innovative Brands continues to build on our deep expertise in the personal care sector and represents yet another successful sale of a portfolio of branded consumer products.
 
Innovative Brands
Client
Innovative Brands, LLC
Brands
Pert Plus® and Sure®
Owner/Parent
Najafi Companies, LLC
Counterparty
Helen of Troy Limited
Segment
Personal Care, OTC & Cosmetics
Transaction
Sale of Company
Transaction Value
Undisclosed
Closing Date
March 31, 2010
Role
Exclusive Financial Advisor
 
 
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