Revlon will soon be back in the salon business. Its wholly owned operating subsidiary, Revlon Consumer Products Corp., has signed a definitive agreement to acquire all of the stock of The Colomer Group, a privately-held company focused on the professional salon channel, for a cash purchase price of $660 million. The announcement was made Aug. 5, and the acquisition is expected to close in the fourth quarter of 2013.
Revlon plans to finance the acquisition with funds underwritten by Citigroup Global Markets.
“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,” says Revlon president and CEO Alan T. Ennis.
“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," states Ennis. "We plan to capitalize on TCG’s extensive geographic and channel distribution, and leverage our collective innovation capability and leadership as we seek to drive growth across our expanded portfolio of brands.”
The Colomer Group strategically complements Revlon. It markets and sells professional products to salons and other professional channels under brands such as Revlon Professional hair care, which it currently licenses from Revlon under a long-term agreement; as well as through CND (Creative Nail Design) professional nail polish, including the Shellac franchise; and American Crew men’s hair care.
The Colomer Group also sells certain brands directly into retail channels, including Natural Honey body lotions and Llongueras hair care, and operates a multicultural haircare business under the Crème of Nature brand.
About 40% of TCG’s sales are is in the United States, with 50% in Europe, the Middle East and Africa, and the balance in the rest of the world.
Lorenzo Delpani, CEO of The Colomer Group, adds, “I am delighted that we are joining the Revlon family. My leadership team and the entire Colomer organization are very proud of our accomplishments in building our business, and we look forward to working with Revlon and continuing the positive momentum of our company.”
The Colomer Group is being acquired from funds advised by CVC Capital Partners, which have owned it for the past 13 years. Throughout that period, a successful transformative program was implemented with a focus on strengthening its core brands and supporting continuous product innovation. The Colomer Group now constitutes a global and additional platform for Revlon to expand its business.
Ennis notes, “Revlon will work collaboratively with the TCG organization to ensure a smooth transition and integration of the collective business. Lorenzo and his leadership team will play a key role in the integration and with respect to the continued success of TCG’s business. This is a tremendous opportunity to reunite the Revlon brand name and for Revlon to continue to drive profitable growth.”
Revlon sold its former professional products division in 2000 for $315 million in a transaction that involved CVC Capital Partners, creating The Colomer Group.
[Image courtesy of Revlon]