Markwins acquires cosmetics company Physicians Formula

California-based cosmetics and skin care products manufacturer Physicians Formula announced that it has entered into a definitive merger agreement with private equity company Markwins International, under which the affiliates of the equity firm will buy Physicians Formula.

The deal will see Markwins buy up all the outstanding shares in the business of $4.90 per share in cash, or approximately $74.9m.

Markwins said the acquisition price represented a premium of approximately 40% over the closing price of the company’s shares before the deal was formalised.

In August 2012, the company had agreed to be taken by private equity fund Swander Pace Capital for $4.25 per share, in the absence of a more attractive offer.

After the closing of the acquisition, Physicians Formula will be owned by Markwins and the employees of Physicians Formula will become employees of Markwins.

The firm said all it employees will continue to be located at the company’s existing facilities in Azusa, California.

Physicians Formula chairwoman and CEO Ingrid Jackel said the company’s board of directors conducted a thorough analysis with its special committee, and determined that the transaction offers the best value to the firm’s stockholders.

"We are pleased that Markwins has agreed to purchase our company. Markwins and Physicians Formula sell non-competing brands in similar channels. Combining the resources and experience of both companies will strengthen the combined portfolio of brands," Jackel added.

The transaction took place with Blackstone Advisory Partners serving as exclusive financial advisor to the Special Committee of the Physicians Formula board of directors, while Sheppard Mullin Richter & Hampton served as the legal advisor to Physicians Formula.

Physcians Formula, created in 1937, develops, markets and distributes premium-priced products for the mass market channel.

The firm’s products are currently sold in 25,000 stores including those operated by Wal-Mart, Target, CVS and Rite Aid.