Cosmetics maker Revlon, Inc. (REV: Quote) Monday said its wholly owned operating subsidiary, Revlon Consumer Products Corp., has signed a definitive agreement to acquire all of the stock of the Colomer Group for $660 million in cash, which is subject to certain adjustments through the closing date. Revlon shares are currently up about 8 percent in the morning trade.
Revlon will be acquiring the privately-held Spanish beauty care company from Funds advised by CVC Capital Partners, which have owned Colomer for the last 13 years. Revlon expects the deal to be accretive to cash flow and earnings in the first year, with Colomer constituting a global and additive platform for Revlon to expand its business.
Colomer is focused on professional salon channel. According to Revlon, Colomer strategically complements the firm as it markets and sells professional products to salons and other professional channels. Professional brand Revlon Professional hair care, is licensed from Revlon under a long-term agreement.
In addition, Colomer Group sells certain brands directly into retail channels, including Natural Honey body lotions and Llongueras hair care. It also operates a multi-cultural hair-care business under Crème of Nature brand, Revlon stated.
Nearly 50 percent of Colomer's sales are in Europe, Middle East and Africa, with 40 percent in the U.S., and the balance in the rest of the world, Revlon said.
The acquisition is expected to close in the fourth quarter of 2013, subject to certain customary conditions and regulatory approvals.
Revlon said it expects to finance the acquisition using funds underwritten by Citigroup Global Markets Inc. pursuant to commitments entered into contemporaneously with the purchase agreement.
Revlon President and Chief Executive Officer Alan Ennis stated, "This acquisition, which we expect to be accretive to cash flow and earnings in the first year, represents a significant and logical strategic step forward for Revlon as it complements our core business, expands our distribution into new channels, and provides meaningful cost synergy opportunities."
CVC Funds had completed the buy-out of Colomer Group in March 2000. Colomer was formerly professional products division of Revlon.
Revlon shares are currently trading at $26.46, up 8 percent on the NYSE.
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by RTT Staff Writer
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