Li & Fung Agrees to Acquire Lornamead for $190 Million
Li & Fung Ltd. (494), the world’s largest supplier of clothes and toys to retailers, agreed to acquire personal-care brand owner Lornamead Acquisition Ltd. for about $190 million.
Lornamead sells more than 20 brands, including “traditional and heritage” U.S., U.K. and German lines such as Finesse, CD, Aqua Net and Lypsyl, Li & Fung said in a statement on its website yesterday. Lornamead’s sales in the year ended March 31 were about $155 million, Li & Fung said.
“The acquisition of Lornamead will further expand our market share in the beauty business on a global basis,” Li & Fung Chief Executive Officer Bruce Rockowitz said in the statement. “This is a very strong platform and will allow us to deepen our relationships with major retailers across all key markets.”
Li & Fung last year raised HK$3.9 billion ($503 million) in its biggest share sale since listing in 1992 as the company seeks acquisitions to spur growth. The company’s stock dropped 15 percent in Hong Kong trading on Jan. 14, the most in five months, after saying operating income slumped 40 percent last year because of weaker U.S. orders.
The company announced the Lornamead purchase after the Hong Kong stock exchange closed yesterday. Li & Fung American depositary receipts fell 0.3 percent to close at $3 in U.S. over-the-counter trading yesterday, after the disclosure. Each ADR represents two underlying common shares.
The Lornamead purchase excludes cash and the Yardley non- U.S. business, which was sold separately in an earlier transaction, Li & Fung said. Lornamead shareholders retained some units, it said.
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