Berkshire Partners and JH Partners Announce Recapitalization of MD Beauty, Inc

Business Wire, May 5, 2004

Business Editors

BOSTON--(BUSINESS WIRE)--May 5, 2004

Berkshire Partners, the Boston-based private equity firm, and JH Partners, the San Francisco-based private equity firm, along with management announced today that they have signed a definitive agreement to recapitalize MD Beauty, Inc. Terms of the transaction were not disclosed. Senior debt financing will be led by BNP Paribas with mezzanine debt coming from Gleacher Mezzanine LLC and York Street Capital Partners. The transaction is expected to close during the first two weeks of June.

Headquartered in San Francisco, California, MD Beauty is one of the fastest growing personal care companies in the U.S. The company is a marketer of branded cosmetics and skin care products focused primarily within the health and beauty and the cosmeceutical markets. MD Beauty markets products under a portfolio that consists of recognized brands such as Bare Escentuals, including its i.d. bareMinerals line, and md formulations. The Company markets its brands through direct response television (both long form infomercials and QVC), 19 company-owned boutiques, premium wholesale accounts, such as Ulta and Sephora, and spas and salons.

"MD Beauty is a dynamic and rapidly growing, multi-channel beauty products company with a very strong, established consumer base," stated Ross M. Jones, Managing Director at Berkshire Partners. "Berkshire Partners is very excited to join JH Partners and senior management in recapitalizing the Company at this juncture and supporting MD Beauty's growth going forward."

"The Company has benefited from the sponsorship of JH Partners and our other investors for over ten years," said MD Beauty President and CEO Leslie Blodgett. "With all of the exciting growth opportunities in front of us, we welcome the addition of Berkshire Partners to our team."

"Berkshire brings significant experience to the table in consumer products and retailing as well as considerable expertise in assisting fast-growing companies, like MD Beauty, to successfully meet their strategic goals," stated John Hansen, President of JH Partners. "We are looking forward to reinvesting with Berkshire Partners in MD Beauty."

CIBC World Markets advised MD Beauty in the transaction.

Berkshire Partners has invested in mid-sized private companies for the past twenty years through six investment funds with aggregate capital commitments of approximately $3.5 billion. The firm's investment strategy is to seek companies that have strong growth prospects and to partner with talented management teams who are interested in being owners of the companies they operate. Berkshire has developed specific industry experience in several areas including consumer products, industrial manufacturing, transportation, communications, business services, and retailing and related services. Berkshire has been an investor in over 75 operating companies with more than $11.0 billion of acquisition value and combined revenues in excess of $14.0 billion. Additional information may be found at www.berkshirepartners.com.

JH Partners, formerly known as Jesse.Hansen&Co. and based in San Francisco, makes private equity investments in growth-oriented middle market consumer products and services companies. Since 1986, the principals of JH Partners have been responsible for approximately $150 million of private equity investments, and the firm is unusual among private equity firms in that each of its principals has senior-level operating experience building middle-market consumer related businesses. JH Partners has been instrumental in aiding the growth of powerful consumer brands, including Peet's Coffee & Tea (NASD: PEET), Bare Escentuals, Performance Bicycle Shop, Bell Helmets, and Design Within Reach, among others. Additional information may be found at www.jhco.com.

Additional information regarding MD Beauty may be found at www.bareescentuals.com.