Parent company of makeup brand Morphe to be acquired; files for Chapter 11

Forma Brands, the parent company of Morphe, Morphe 2 and Lipstick Queen, has agreed to be acquired in a deal that it said will position it for long-term growth.

To facilitate the sale process, Forma and all of its domestic direct and indirect subsidiaries have initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware. The filing comes days after Morphe closed all its stores in the United States and said it would focus on its e-commerce and wholesale operations. 

Forma’s parent company, FB Debt Financing Guarantor, has agreed be acquired by a group of its secured lenders, including Jefferies Finance, under which “substantially” all of Forma’s assets would be acquired, including its wholesale operations, online platforms and international Morphe retail stores.

The company has received a commitment for approximately $33 million in debtor-in-possession financing from the investor group. 

“This agreement is a testament to the strength of our brands most meaningful to our consumers, including Morphe and Morphe 2,” said Forma president Simon Cowell. “We will have additional financial resources available to invest in our multi-category portfolio, product launches and innovative brand and marketing strategy as we advance our vision to inspire creativity, promote inclusivity and connect with consumers around the world through beauty.”

In connection with the court-supervised sale and restructuring process, the company has appointed Stephen Marotta as chief restructuring officer.  He is a senior managing director at Ankura Consulting Group, LLC with more than 35 years of financial restructuring experience. Marotta previously served as chief restructuring officer at Brooks Brothers and Payless ShoeSource, among others.

The proposed transaction is expected to significantly strengthen Forma’s financial position and provide additional support for the execution of its long-term growth strategy, which will focus largely on its global wholesale and e-commerce operations, the company said.

Forma’s product development initiatives, brand launch plans and marketing collaborations remain in place. Customers can continue to shop Forma’s online platforms and international Morphe stores throughout the process.

“We are excited to reinforce our focus on the opportunities we see ahead for our brands and continue bringing our thoughtfully selected beauty products to consumers through our individual online brand platforms, retail partners and Morphe stores outside the U.S.,” Cowell said.

Ropes & Gray LLP is serving as legal advisor to Forma Brands, Ankura Consulting Group is serving as financial advisor and Configure Partners is serving as investment banker.