Unilever’s acquisition of Alberto-Culver to boost company’s local, int’l presence

ROTTERDAM, Netherlands —In a move that wasn’t exactly a surprise to many industry observers, Unilever announced plans to acquire Alberto-Culver for $3.7 billion in cash, a deal that significantly will boost Unilever’s hair care portfolio.

Alberto-Culver’s TRESemme and Nexxus styling and conditioning brands will complement Unilever’s Suave, Dove and Sunsilk. The deal makes Unilever the world’s leading company in hair conditioning, the second-largest in shampoo and the third-largest in styling, Unilever stated. It significantly enhances Unilever’s hair care presence in the United States, Canada, the United Kingdom, Mexico and Australia. In skin care, Alberto-Culver’s portfolio includes such brands as St. Ives and Simple.

The news of the acquisition was not unexpected. In August 2009, Morgan Stanley analyst Dara Mohsenian stated in a research note, “Alberto’s relatively less-efficient [selling, general and administrative expense] cost structure could offer cost synergies to a hypothetical acquirer. Alberto has U.S. scale that some international companies lack, as well as international distribution expansion potential that a number of companies could capitalize upon. Alberto has a healthy balance sheet, which could be attractive in the context of a consolidating industry.”

Unilever has stated that the acquisition, which is subject to regulatory approval, is expected to deliver significant synergies and, excluding restructuring costs, will be accretive to EPS in the first full year.

Alberto generated sales of nearly $1.6 billion and EBITDA of more than $250 million for the 12-month period ended June 30. It has operations in nine countries, six manufacturing facilities and employs roughly 2,700 people.

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