Coty sells off two specialty bath brands
and Calgon to New Jersey-based Ascendia Brands, in a move that will
almost double the company's annual turnover and strengthen its lead
in the bath category as a whole.
The definitive agreement to acquire the brands will cost Ascendia $125m, as well as an additional milestone payment of $20m in subordinated debts to be paid by July 2009.
Calgon and the healing garden are currently claimed to be the number one and number two brands respectively in the US market and will add to a portfolio that already includes brands such as Lander and Lander Essentials - which already hold the top position in the basic bath segment - and Mr. Bubble and Lander Kids - which lead the children's bath category.
Speaking of the brand acquisitions, Ascendia CEO Joseph Falsetti said that the deal will 'solidify' the company's position in both the bath and specialty bath categories.
"We expect this acquisition will create attractive strategic and financial synergies as we continue to grow our business," he added. "We expect that the focus Ascendia will bring to these brands will provide the best opportunity for these brands to flourish in the marketplace."
Ascendia said it was aiming to complete the acquisition financing, together with regulatory conditions by the beginning of March. Falsetti also said that the company would continue to use the services of Prentice Capital to support the transaction, as it has done for the past three years.
The deal also defines France-based Coty's position on the market, tailoring its portfolio towards the premium fragrances and skin care products that have come to dominate its business portfolio.
"While we respect these brands and their contribution to our success, Coty constantly reviews its portfolio mix, and the strategic fit of its brands, emphasizing global versus local brands, especially in the fragrances and cosmetics businesses," said Bernd Beetz, Coty's CEO.
Beetz went on to say that the company intended to continue acquiring and selectively divesting brands in accordance with this overall business strategy. Last year Coty announced that it was investing in its US fragrance production facilities in an effort to expand this area of the business.
Strong fragrance sales have been leading the company's financial performance of late, with new fragrances featuring high profile singers Kylie Minogue and Gwen Stefani proving to be a big hit with consumers in both Europe and the US in the all important holiday trading period.
