Bare Escentuals and M.D. Formulations MergeNew Company Named M.D. Beauty

SAN FRANCISCO, CA - November 05, 2001 - Bare Escentuals and M.D. Formulations have agreed to combine beauty companies as of October 31, 2001 and will be renamed M.D. Beauty. Branded product sales for the combined companies at retail will exceed $80 million annually. While M.D. Beauty will remain privately held, the transaction is estimated to be valued at approximately $50 million.

Bare Escentuals is a developer and multi-channel marketer of all natural skin care, body care and cosmetic products that are sold through major beauty retailers, 21 company-owned retail boutiques, mail order, the internet, and direct response television. The company is best known for its revolutionary mineral make-up called bareMinerals, the nation's leading mineral cosmetic line.

M.D. Formulations, also known by the corporate name Bioceutix, markets proprietary cosmecutical products in several trade channels; primarily salons and spas as well as physicians in the U.S. and 17 other countries. The M.D. Formulations and M.D. Forte brands are highly regarded for the treatment of aging skin.

"This union will offer tremendous domestic and international growth opportunities for both companies in their respective channels of distribution. These brands are poised to compliment one another and reach millions of women seeking the best beauty solutions," says Blodgett, who will be President of the combined companies. Blodgett, who was appointed Bare Escentuals' Senior Vice President in 1994, became its President in 1995.

"M.D. Formulations has always been about the intersection of beauty and science; this merger makes our promise real, introducing professional quality mineral makeup into the finest salons and spas," said David Stern, former President of M.D. Formulations, remaining in a senior role spearheading growth overseas. "I am excited to be a part of this team dedicated to building great beauty brands."

Blodgett's team includes Staci Wilson, Senior Vice President of Bare Escentuals, a beauty industry veteran from Nordstrom and Sephora, who joined Bare Escentuals in January and has responsibility for retail operations and wholesale distribution. She is joined by Sharon Zuckerman, Vice President of M.D. Formulations, with 10 years of executive beauty industry experience at both Federated and May Companies and most recently the skin care buyer for Sephora. Sharon will be responsible for the MD Formulations, domestic business.

Both companies are controlled by San Francisco-based private equity firm Jesse.Hansen&Co. Jesse.Hansen&Co invests in management buyouts and provides expansion capital for emerging and established growth companies. The company's investments are focused primarily on consumer and marketing driven companies. Other Jesse.Hansen&Co consumer related partner companies include: Peet's Coffee & Tea (NASD: PEET), Design Within Reach, and Walter Drake, Inc.

Contact: Rebecca Brooks/Julie Heisler
The Brooks Group
212-736-1701