The big naturals personal care brands will be ripe for takeover in a year or so, said Chicago-based grocery consultant Fred Arnal. But for now, one of the largest of those brands has had no interest from mainstream companies.

Burt's Bees President Roxanne Quimby said she hasn't been contacted by any conventional personal care companies about buying her Durham, N.C.-based business. Instead, Quimby is looking for financial companies willing to partner with Burt's Bees, which had $55 million in sales last year.

"I own the whole thing myself, and as I approach my mid-50s, I have to be thinking about succession. But we're not ready to be rolled into some big, enormous personal care company."

Quimby plans to retain ownership of her company, but "whether it's the majority or not depends on the eventual partnership and how much control they want," she said.

Earlier this year, Quimby hired New York-based Elixir Advisors to evaluate about 40 proposals. "We receive a half dozen a month," she said. "I would like to think we'll make a decision this year."

Burt's Bees is looking for $90 million to $145 million in investments, equivalent to the standard formula of $1 invested for every $6 to $8 in earnings before interest, taxes, depreciation and amortization. Burt's Bees' 2002 EBITDA was around $15 million to $18 million, Quimby said.

"The big question for investors is, 'Can this brand work outside the naturals market? Can this brand make it in a mass-market environment?' " she said. About 10 percent of Burt's Bees business is in mass market stores; 30 percent is in natural foods stores and 60 percent is in specialty stores.

Quimby said the mass-market problem explains why mainstream personal care companies haven't noticed Burt's Bees. "I don't think they've been able to recognize that natural personal care may have the same upside as the other brands they're buying."

Arnal agrees but points out, "One of these brands, when they gain prominence, is ripe for a takeover by Nivea, Neutrogena—any company that's made a certain name for itself in that sort of natural care."

Vicky Uhland is a Denver-based freelance writer.

Natural Foods Merchandiser volume XXIV/number 8/p. 12