By Aditi Shrivastava
Aug 5 Cosmetics maker Revlon Inc will
buy Spanish beauty care company The Colomer Group for $660
million, reacquiring a professional products business it sold 13
Colomer Group, owned by CVC Capital Partners, manufactures
and sells products such as Revlon Professional hair care under
license to salons and other businesses.
Revlon sold its professional products business in 2000 to
the Colomer family and CVC Capital Partners for $315 million.
The Barcelona-based company, renamed The Colomer Group
(TCG), has since expanded into consumer brands such as Natural
Honey body lotions and Llongueras hair care. It gets 40 percent
of its revenue from the United States.
"Revlon's reentry into the professional salon channel comes
at a time when its U.S. color cosmetics business is treading
water," BMO Capital analyst Connie Maneaty said in a note. She
maintained her "market perform" rating and $25 price target on
Revlon's shares rose more than 8 percent to a seven-year
high of $26.58 on the New York Stock Exchange on Monday.
"TCG's presence in the professional salon channel, which
Revlon currently does not serve, will expand our product
offering and enable us to reach new consumers," Revlon Chief
Executive Alan Ennis said.
Revlon's revenue for the quarter ended June 30 fell 2
percent to $350.1 million, hit by lower sales of its Almay color
cosmetics brand. TCG has annual revenue of 405 million euros
($538 million), according to CVC's website.
Revlon makes and sells cosmetics, women's hair color, beauty
tools, fragrances and skincare.
The company, which owns brands such as Almay, Sinful Colors,
Mitchum and Charlie, is majority owned by 70-year-old buyout
titan Ronald Perelman.
The Wharton graduate began learning the buyout business from
his father, attending board meetings when he was in elementary
school, according to his Forbes page.
The deal is expected to close in the fourth quarter and be
accretive to cash flow and earnings in the first year, Revlon
Revlon, said it expects to finance the deal with funds
underwritten by Citigroup Global Markets Inc. Citigroup
committed to provide Revlon with a new $1.375 billion senior
secured term loan facility.