Revlon to buy Elizabeth Arden for $870m

Cosmetics giant Revlon has agreed to buy Elizabeth Arden for $14 per share in cash, representing an enterprise value of around $870m.

The offer represents a 50% premium over Elizabeth Arden’s closing share price of $9.31 on Thursday.

Revlon said it expects to achieve cost synergies of approximately $140m through the elimination of duplicate activities, leveraging purchasing scale, and optimising the manufacturing and distribution networks of the combined company.

Fabian Garcia, president and chief executive officer of Revlon, said the deal – expected to complete by the end of 2016 – was strategically and financially compelling.

“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,” he said.

“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.”

BofA Merrill Lynch and Citigroup Global Markets Inc. have committed around $2.6bn of financing to fund the acquisition and refinance Elizabeth Arden’s existing debt, as well as Revlon’s existing bank term loan and revolving credit facility.