Revlon Inc., the maker of cosmetics under its namesake and Almay brands, agreed to buy the Colomer Group for about $660 million in cash from CVC Capital Partners to bolster its offerings to professional salon customers.
The acquisition is expected to close in the fourth quarter, New York-based Revlon said today in a statement. The takeover will be financed using funds underwritten by Citigroup Inc.
Revlon, which has been introducing new products and buying brands as sales in some of its larger lines slow, is following rivals such as Procter & Gamble Co. and Unilever in adding salon-focused businesses. The takeover announced today gives Revlon the Creative Nail professional and Shellac nail polishes as well as American Crew men’s haircare products.
“The acquisition does provide Revlon with access to a new channel of distribution as well as new customers,” said David Wu, an analyst at Telsey Advisory Group in New York.
The profitability of professional cosmetics is among the highest in the makeup industry, and sales to salons may improve during the next year as the economy rebounds, Wu Said.
Revlon rose 6.8 percent to $26.16 at the close in New York. The shares have gained 80 percent this year, compared with a 20 percent gain for the Standard & Poor’s 500 Index.
Other cosmetics companies have added products and services aimed at salon customers. Unilever in 2011 bought Alberto-Culver Co. for about $3.7 billion, giving it the Nexxus haircare brand. P&G, the world’s largest consumer-products company, has added salon brands such as Wella Illumina hair coloring.
The Colomer Group acquisition also will give Revlon some geographic diversity. The company gets about half of its sales from Europe, the Middle East and Africa and about 40 percent from the U.S., while Revlon got 56 percent of its sales from the U.S. last year, according to data compiled by Bloomberg.