By Katie Davis R evlon has announced that it is opening up their purse and buying Elizabeth Arden, a deal uniting two giant names in the world of beauty and cosmetics, for about $420 million in cash. The companies say the total amount of the deal is $870 million when you include assumed debt with the purchase. Company founder Elizabeth Arden opened her first Red Door salon on New York’s Fifth Avenue in 1910. The company now based in Miramar, Florida, sells skin-care and fragrance products in 120 countries. It was in the midst of trying to turn its business around and posted a loss of $28.4 million on revenue of $191.9 million in its most recent quarter.
The New York company is paying $14 for each Elizabeth Arden share, a premium of 50 percent over their closing price on the previous day of trading. Revlon said they expect the deal to close this year and that the combined company will benefit from having a presence in more markets worldwide and expects savings of about $140 million from the combination.
Revlon was founded in 1932 with the launch of nail enamel. It posted a first- quarter profit of $11 million on sales of $439.6 million.
News of the purchase surged Arden shares up 49 percent, while Revlon’s stock gained more than 6 percent, a sign that the purchase was liked by the market and seen as a good fit for both brands.
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JULY 2016 • SPOTLIGHT ON BUSINESS
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