Shiseido seeks to expand business through Bare Escentuals acquisition
TOKYO and SAN FRANCISCO Japan-based cosmetics company Shiseido is looking to acquire Bare Escentuals, a maker of mineral-based makeup, for about $1.7 billion in an all-cash deal.
The transaction was approved by the boards of directors of both companies and is expected to close in the first quarter 2010.
Shiseido, through a U.S. subsidiary, plans to purchase all outstanding shares of Bare Escentuals common stock for $18.20 per share. This represents a 40.8% premium to Bare Escentuals’ average closing stock price over the last three-month period ended Jan. 13, and a 39.9% premium over the closing price of Bare Escentuals’ common stock on Jan. 13.
Bare Escentuals’ business will operate as a separate division of Shiseido and its brands will continue to be managed by the current leadership team.
In connection with and as a condition to the tender offer, Leslie Blodgett, CEO of Bare Escentuals, has entered an amended license agreement with Bare Escentuals. She also has entered, along with CFO and COO of Bare Escentuals, Myles McCormick, a new employment agreement with Bare Escentuals that will take effect upon the closing of the tender offer.
“This looks to be a good operational fit for both companies. Bare’s growth over the new few years was largely expected to come outside the United States, particularly in Japan,” stated SunTrust Robinson Humphrey analyst William Chappell in a research note. “The merger with Shiseido should help accelerate this growth, while also giving that company a stronger foothold in the United States.”
Currently, more than 85% of Bare Escentuals’ revenue is generated in the United States through retail and direct sales.
Shiseido is Japan’s largest cosmetics company, with operations in more than 70 countries worldwide. It already is among the top three cosmetics brands in China and other Asian markets and has been increasing its global diversification. Shiseido has gained prominence in the U.S. retail market since the 1960s and operates several R&D facilities in the United States.
The companies stated that the deal will strengthen both companies and provide a platform for further growth by:
- Expanding Shiseido’s brand portfolio into the mineral-based cosmetics market, attracting a wider customer base;
- Creating a complementary multi-channel and truly global distribution network, giving Bare Escentuals greater access to Japan, as well as other fast-growing in such Asian markets as China;
- Strengthening Shiseido’s U.S. and European business;
- Maximizing both companies’ production capabilities and R&D resources;
- Delivering a significant premium to Bare Escentuals shareholders; and
- Offering compelling growth prospects and future value creation for Shiseido shareholders.
CVS’ Beauty360 expands presence to Internet
WOONSOCKET, R.I. CVS/pharmacy’s upscale Beauty360 retail concept now has e-commerce capabilities, enabling shoppers to buy everyday necessities and prescriptions, as well as prestige beauty products through a shared shopping basket, across both CVS.com and Beauty360.com.
“CVS/pharmacy has always been a leader in beauty, and launching the Beauty360 concept was a milestone for us in being able to provide our customers with greater access to the prestige beauty products they love,” stated Mike Bloom, SVP merchandising and supply chain. “With the introduction of e-commerce for Beauty360, we are making shopping for these luxury beauty products more convenient for everyone — especially the nearly 6 million customers who visit CVS.com each month.”
Since its launch in November 2008, the Beauty360 concept has grown to eight locations nationwide with additional locations expected to open throughout 2010.
The Beauty360.com site offers such prestige brands as Freeze 24.7, Jack Black, Anthony Logistics for Men, Laura Geller, Paula Dorf and Borba Cosmetics.
Beauty360 shoppers can also reap the benefits of the CVS/pharmacy ExtraCare Rewards program, which provides 2% money back on all purchases among other benefits.
Helen of Troy reports sales drop in Q3
EL PASO, Texas The unfavorable retail economy hampered Helen of Troy’s personal care segment during the third quarter, as the developer and marketer of personal care and household consumer products posted a decrease in net sales.
Net sales in the personal care segment for the quarter ended Nov. 30 decreased 4.4% to $134.2 million compared with $140.3 million in the year-ago period. The company noted that the grooming, skin care and hair care solutions category achieved net sales growth during the quarter, while hair care appliances and accessories net sales decreased during the period.
Meanwhile, its housewares segment (OXO) posted a 21.8% boost in net sales during the quarter.
Total net sales for the company were $189.4 million versus net sales of $185.6 million in he year-ago period, an increase of 2%. Earnings were $24.7 million, or 80 cents per diluted share, compared with $15.1 million, or 48 cents per share.
The company’s personal care products include hair dryers, curling irons, hair setters, shavers, brushes, combs, hair accessories, home hair clippers, mirrors, foot baths, body massagers, paraffin baths, liquid hair styling products, body powder and skin care products.