Cosmetics manufacturer GMS secures $3m financing from Sterling Merchant Finance

GMS Capital has entered into a financing agreement with Sterling Merchant Finance, in a bid to expand its global distribution network for its Nacara Brand cosmetics and other brands.

Under the agreement, Sterling will provide $3m financing to GMS, which is to be used in part to finance the takeover by the company of a controlling position in a Canadian company, which operates a major international distribution network.

GMS Capital will use its control to rapidly expand its Nacara Brand line of specialised cosmetics as well as increasing distribution of complementary brands in global markets.

The investment would be done in two separate parts of $1.5m, with the first tranche to close in the coming weeks.

Sterling, in consideration of its investment, will receive a warrant series convertible into 898,204 common shares of the company per $1.5m investment tranche, representing a 12.085% ownership stake in the company.

Sterling CEO Sir Roger Jantio, commenting on the financing, said,"This alliance falls in line with one of our missions to promote businesses that cater to the needs of people of African and African-American descent, such as GMS Capital’s Nacara cosmetics line for women of darker skin complexion."

GMS Chairman and Nacara Brand founder Caroline Coulombe said the new investment from Sterling will enable the firm to dig deep into its relationships with leading French, Canadian and African cosmetics retailers into an expanded global reach, to serve larger number of consumers who require skin care products designed and manufactured for their specific needs.

Sterling Merchant Finance is a Washington-based merchant banking firm, which is active in emerging countries (notably in Africa and with its Diaspora).