KDC/ONE to acquire Swallowfield manufacturing business for £35m

Knowlton Development (KDC/ONE), a North American contract manufacturer and custom formulator for the beauty, health and personal care brands, has signed a conditional agreement to acquire the manufacturing business and associated assets of UK firm Swallowfield for £35m.

The UK company is involved in the development, formulation, and production of products for personal care and beauty brands.

The acquisition is subject to adjustment for the working capital of the manufacturing business at the date of completion.

To be based in Teddington, Swallowfield will retain the owned brands division after the transaction. The group is also expected to change its name to Brand Architekts Group.

The manufacturing business and associated assets will be owned by KDC/ONE and operate as KDC/ONE Swallowfield.

Employees belonging to the manufacturing business will transfer to the North American company.

Expected to close in August 2019, the transaction is subject to the approval of shareholders of Swallowfield.

KPMG is acting as financial advisor to KDC/ONE, and Weil, Gotshal & Manges as legal advisor. Baylor Klein is acting as financial advisor to Swallowfield, and Ashfords as legal advisor.

Swallowfield chief financial officer Matthew Gazzard will be KDC/ONE Swallowfield president. Jane Fletcher will be KDC/ONE Swallowfield sales and marketing director.

Tim Perman will continue to be the chief executive officer of Swallowfield’s brand business.

Swallowfield’s manufacturing offering includes aerosols, hot pour products, cosmetic pencils, fragrance, and gifting.

In Europe, Swallowfield operates two facilities in the UK and one in the Czech Republic. It also has a sourcing office in China and sales offices in Paris and New York.

KDC/ONE is one of the major brands in personal care, beauty, home, industrial and auto care in North America.

As part of its international growth strategy, KDC/ONE partnered with private investment firm Cornell Capital, based in New York and Hong Kong, alongside other investors, including Caisse de dépôt et placement du Québec (CDPQ), Investissement Québec and HarbourVest Partners, in December 2018.

The transaction with Swallowfield is expected to expand the North American company’s manufacturing capabilities in Europe, add technologies and diversify its customer base, and bolster its existing distribution channels.