Private equity has come calling for Australian beauty products label Frank Body.

Street Talk can reveal Frank Body, which was founded by five friends in Melbourne and is best known for its coffee-based skin scrubs, has sold a stake to Chinese private equity firm EverYi Capital, in a deal valuing it at about $100 million.

Frank Body co-founders Bree Johnson, Steve Rowley, Jess Hatzis and Alex Boffa will retain a controlling stake.

Frank Body is expected to use the equity injection and its new investor’s contacts to grow the business in China, starting with a new team in Shanghai that will work to ramp up sales to Chinese Millennials.

Co-founder Steve Rowley told Street Talk the deal was a long time in the making and was complicated by the pandemic, but it would be crucial to his company’s global expansion.

“[EverYi Capital] run a really tight ship,” he said.

“You only need to look at the early success they are having with LA-based make-up brand Lime Crime, and what they did with nail polish brand Little Ondine which was sold to an extremely fast-growing beauty conglomerate listed on the New York Stock Exchange.

“They have strong connections within the China beauty network and a great understanding of the market and how we can make Frank Body relevant in China.”

Post the EverYi investment, Frank Body products will continue to be innovated and manufactured in
Australia and the US and will remain cruelty-free by not being tested on animals.

Rowley said it was important Frank Body had “localised assistance” to grow in China. The company is based in Australia but has expanded offshore; more than half of its revenue is already made in the United States.

Frank Body is expected to target Chinese social media platforms to help establish its brand and grow sales. The group already sells into China via Tmall, a Chinese-language website for business-to-consumer online retail transactions, but wants to expand on to other distribution platforms.

EverYi Capital’s investment is a minority stake. The firm’s Suan Shui-Shen Lin will join Frank Body’s board alongside the company’s co-founders and a representative from Unilever Ventures. Frank Body has mandated that 50 percent of its board seats must be held by women.

Co-founders Rowley, Bree Johnson, Jess Hatzis and Alex Boffa, who started the business with $5000 in a coffee shop in 2013, will retain a controlling stake.

Alice Wells from Melbourne boutique Lempriere Wells advised Frank Body. Lawyers from Coghlan Duffy + Co, Arnold Bloch Leibler, Gilbert + Tobin and Johnson Winter and Slattery tended to the various parties.

“We’ve worked with Alice [Wells] for a number of years and knowing the intricacies of our business as she does, she made the introduction to [EverYi Capital] who have significant expertise in the region,” Rowley said.

Rowley said the board would consider an ASX listing in the future, although such a move would be three to four years away. Its goal is to be Australia’s largest beauty exporter, and has increased sales by 40 per cent a year on average in the past three years.

Frank Body’s move comes as China is due to start relaxing animal testing requirements for cosmetics from May 1. “We are a firm no to any animal testing,” Rowley said.

Frank Body has about 50 staff, including 15 in New York. Its best-selling products include a 200g bag of coffee scrub, which sells online for $16.95, and a $14.95 clean deodorant stick.

“The investment, struck mid pandemic and in a very singular and targeted manner, is a true testament to the brand’s quality foundations, dedicated team and exciting growth prospects,” Wells said.

“EverYi Capital shares both our passion for the consumer and our values around clean, accessible beauty and personal care products,” CEO Steve Rowley told Street Talk.