LVMH, Groupe Arnault and Catterton partner to create new investment company

The three consumer-focused companies will join forces to create global firm L Catterton

Fashion and cosmetics consumer products giant LVMH has entered into an agreement with major shareholder Groupe Arnault and private equity firm Catterton to create a new company called L Catterton. Groupe Arnault is the family holding company of Bernard Arnault, who is Chairman and CEO of LVMH and Groupe Arnault.

L Catterton is being hailed as the largest global consumer-focused investment firm, with assets expected to grow under management to more than $12bn after successor funds close. The main agenda of L Catterton will include consumer buyouts and growth investments across all major consumer markets in North America, Europe, Asia and Latin America.

In the cosmetics industry specifically, Catterton recently took spa products manufacturer and education provider Steiner Leisure private by acquiring all of the outstanding shares in the company for approximately $925m, including debt. LVMH owns a number of cosmetics brands including Benefit, Fresh and Make Up For Ever, as well as fragrance names such as Kenzo and Givenchy Parfums.

The latest deal, expected to be finalised early this year, will see the partners of L Catterton own 60% of the newly formed venture. LVMH and Groupe Arnault will jointly own the remaining 40%. The agreement will see Catterton’s North American and Latin American operations fuse with LVMH and Groupe Arnault’s European and Asian private equity and real estate operations, which currently fall under the L Capital and L Real Estate franchises.

LVMH and Group Arnault have been investors in Catterton’s funds since 1998. Speaking about the newly formed company, Arnault said: “L Catterton will provide investors with a unique value creation platform, bringing together our global network and industry expertise with Catterton’s long-standing operational approach to building value in consumer investments.” He added: “I would also like especially to thank Daniel Piette whose entrepreneurship and leadership have been instrumental in creating and developing the L Capital franchise over the past 15 years.” Piette is currently Chairman of LVMH Investment Funds and a member of the LVMH Executive Committee.

L Catterton will be dual-headquartered in Greenwich, Connecticut in the US, and in London in the UK. The newly formed company will be headed up by Global Co-CEOs J Michael Chu and Scott A Dahnke, who are both Managing Parnters at Catterton. Chu said: “The breadth of our collective expertise will be second to none in the consumer industry, and we look forward to benefitting from the strength and global reach of the team at L Capital and L Real Estate as we continue to seek out investment opportunities with significant growth potential.”

Dahnke spoke about how the globalisation of media and technology, and increasingly fluid geographic borders, has fuelled consumer growth on “an unprecedented scale”. He said: “Together, Catterton and L Capital will create a global consumer investing franchise with unmatched access to resources in the industry. We expect this combination to further our mission of investing in high growth opportunities in categories with attractive consumer economics.”

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