Revlon sells off brands in Brazil
The US-based cosmetics company has been on the road to recovery for the past few years and has just posted strong preliminary second quarter results that put it back into the black.
Sale of the men's hair care line
It has sold its Brazilian subsidiary Ceil Comercio E Distribuidora to a Brazilian consumer products corporation and with it a number of non-core brands including the men's hair care and shaving line Bozzano.
Revlon expects net proceeds of the sales to total $94m from a gross purchase price of $104m.
Revlon has not disclosed exactly what it will do with the injection of cash and the company stated that it is still evaluating the most appropriate use of the proceeds.
"Our business strategy is to build and leverage our strong brands worldwide, particularly the Revlon brand. This transaction presented Revlon with an opportunity to monetize a non-core, non-strategic brand at a very attractive valuation, while enabling us to remain focused on building our core brands around the world," said CEO David Kennedy.
The company is not pulling out of the Brazilian market altogether as its color cosmetics line will continue to be sold in the market by a third party distributor.
Back into the black
Earlier this month Revlon released preliminary second quarter results that suggest the company is on its way to better things after a difficult few years.
Net sales rose 8 percent to $375m driven largely by a high number of successful new product launches in the color cosmetics sector.
The bottom line experienced the greatest transformation as a net loss of $11.3m in the equivalent quarter in 2007 became a net profit of $20m this year.
The results beat market expectations, according to Associated Press.
The press agency said analysts surveyed by Thomson Financial had predicted a net loss of 2 points per share. Revlon actually reported a profit of 4 points per share.
