Newspaper article The Canadian Press

Health and Beauty Maker KDC Seeks Expansion Following $165M Investment

Newspaper article The Canadian Press

Health and Beauty Maker KDC Seeks Expansion Following $165M Investment

Article excerpt

KDC targets growth following investment

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MONTREAL - The owners of a former Clairol hair colouring plant in Quebec plan to use an infusion of cash from a private equity firm and several institutional investors to double its size and solidify its role as an industry leader in health and beauty products.

KDC (Knowlton Development Corp.), which makes products like deodorant, soaps and shampoos for blue chip clients such as Procter & Gamble, says the more than $165 million investment will support efforts to boost annual revenues to $1 billion by 2018.

"We're looking to do acquisitions in a global way," said Michel Cote, KDC chairman and senior partner of private equity firm Novacap Industries.

The first target will be other niche players in North America, followed by expansions possibly in Latin America, Europe or Asia.

"Our customers are worldwide customers and they like to see us expanding our footprint to other regions," he said in an interview.

Novacap, a private equity firm with $1.5 billion under management, and several unidentified partners acquired KDC in 2002 from managers of the Clairol plant in Knowlton. The workers had bought the facility from Bristol-Myers after it shut the doors in 1991.

Under KDC's leadership, annual sales grew to $500 million from $60 million as more than $140 million was invested in new equipment, the size of the Knowlton plant was doubled and a $58-million production facility was added in Columbus, Ohio.

Employment at the Eastern Townships headquarters increased to 900 from less than 300 as total KDC employment grew to about 2,200. KDC also operates a smaller facility with about 100 workers in Mississauga, Ont., and a large plant in Lynchburg, Va.

Cote said sales initially dipped in 2002 to about $45 million as the new owners stopped making private label products and focused on becoming a top supplier to Fortune 500 companies that were looking to outsource production of their top brands.

Initial efforts to attract the interest of large multinationals was a struggle. But he said the strategy eventually paid off with KDC becoming a large North American supplier to the health and beauty industry. …

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