The international beauty supplier market took another huge consolidation step today with the news that US giant Revlon has agreed to buy Elizabeth Arden for around $870m – the current equivalent valuation at $14.00 per share cash.
Revlon said today that it will obviously benefit from greater scale, an expanded global footprint and ‘a significant presence across all major beauty channels and categories’, as a result of the purchase which is also being welcomed by Elizabeth Arden President and CEO E. Scott Beattie, who said it will deliver ‘certain value to our shareholders’.
BOTH PARTIES SUPPORT DEAL
By contrast, Fabian Garcia, President and CEO of Revlon, Inc., described the acquisition as both strategically and financially compelling: “Elizabeth Arden and Revlon are both known for their iconic brands, entrepreneurial spirit and commitment to innovation, quality and excellence,” said Garcia.
“Revlon plans to build upon Elizabeth Arden’s ongoing transformation by further enhancing the brand, with even more vibrant and relevant product development and marketing, while carefully preserving its unique heritage within prestige.
“Combining our brands, talent, and global distribution will give our company a significant presence in all major channels and categories, while accelerating sales growth in existing and new geographic regions. We look forward to bringing together our two top-notch teams to form a global leader in beauty.”
$140m-WORTH OF SYNERGIES IDENTIFIED
In a statement today, Revlon said that the acquisition should save both companies cost synergies of around $140m with Revlon’s scale across major vendors and manufacturing partners, while ‘improving distribution and procurement. Both companies will also eliminate duplicated activities, while leveraging purchasing, and optimising both manufacturing and distribution networks in the new entity.
Meanwhile, Elizabeth Arden’s Scott Beattie said: “We believe this is a compelling transaction that delivers certain value to our shareholders, while recognizing the unique equity in the Elizabeth Arden brand, our impressive fragrance portfolio and global footprint, as well as the positive momentum and growth potential for our business.
“We look forward to working with the Revlon leadership team to create a leading global beauty company, able to provide accelerated growth for the Elizabeth Arden-branded products, as well as our prestige licensed fragrance portfolio, and broader opportunities for many of our employees.”
In their own words, both companies briefly summed up the strategic benefits of this ‘merger’ as they see it as follows:
- Expanded Category Mix: Revlon’s strength and expertise in colour cosmetics, hair care, men’s grooming, antiperspirants, deodorants and beauty tools will be complemented by the addition of Elizabeth Arden’s world-class portfolio of licensed prestige fragrances and the internationally recognized line of Elizabeth Arden-branded prestige skin care, colour cosmetics and fragrance products – highly profitable categories that are key to future industry growth.
- Channel Diversification: Elizabeth Arden’s strong global reach in prestige distribution and travel retail will complement Revlon’s strength in mass and salons, strongly positioning the combined company in all key beauty channels.
- Broader Geographic Footprint: Revlon currently sells its products in approximately 130 countries. With Elizabeth Arden’s presence in important international growth regions, including Asia Pacific, the combined company will be better positioned to compete globally.