Last week we covered a group of interesting merger and acquisition endeavours. It included stories from Amway, Avon, Mary Kay, Yves Rocher, Arbonne, Pampered Chef, Vorwerk and Jafra. We continue this week with another group that I believe also are worth remembering.
Avon Once Again, an Attractive Prospect
After Mary Kay’s and Amway’s attempts in 1989, this time Coty, the multinational beauty giant was targeting Avon. In April 2012, Coty announced it had offered approximately $10 billion, representing a substantial premium of 27% over Avon’s share price. Coty was so determined to make this acquisition happen, this public announcement came after the unsuccessful attempts to bring Avon in discussions. The idea was to inform Avon’s shareholders publicly of the significant value in the offer.
Having not reached anywhere even after this publicly-made move, Coty increased its offer to $10.7 billion a month later.
After waiting for a few days, Coty announced it withdrew its proposal saying Avon had missed the deadline to start discussing a deal.
Avon management’s decision was hardly to the shareholders’ benefits. Coty’s offer, which was found “low” by Avon, was $24.75/share. An Avon shareholder who kept the stocks until 2018 would see its value at $1.50!
North America Separates from Avon
In late 2015, Cerberus, a $29 billion investment company in the U.S., said it was acquiring Avon’s North America business. This unit included United States, Canada, and Puerto Rico.
The transaction was quite complicated, but in short:
- Avon North America would be a separate company majority-owned and managed by Cerberus. Cerberus would pay Avon $170 million for 80% of Avon North America.
- Cerberus would also make a $435 million investment in Avon (i.e. the parent company), totaling the value of the transaction at $605 million.
This newly-formed company was named “New Avon” and continued its operations under Cerberus for about four years.
In April 2019, LG Household & Health Care said it would acquire New Avon. LG is one of Korea’s leading companies with strong positions in several categories including beauty and personal care. This time, New Avon’s transaction was valued at $125 million, according to the deal LG and Cerberus had reached.
New Avon changed its name to “The Avon Company” in 2021.
Coty’s Love of Direct Selling
Following the unsuccessful Avon bid in 2012, apparently Coty’s love of direct selling did not die down.
The company announced in early 2017 that it would buy 60% of Younique, the cosmetics direct seller having $400 million annual sales. Founders would own the remaining 40% and Coty would pay $600 million, valuing Younique at $1 billion.
Only after two years in May 2019, Coty stated its dissatisfaction with this acquisition. Company CEO said, “The weakness is relatively simple. Younique, like all multi-level marketing businesses, has gone through a phase of classic hype. Unfortunately, we are in the de-hype phase.”
A few months later in August, Coty issued a press release stating that the two companies would part and go their own ways.
Natura’s Series of Company Acquisitions
Headquartered in Brazil, Natura had been a very successful cosmetics direct seller operating mainly in Latin America for many years. In 2012, we heard it would be buying Aesop, an Australia-based personal care retailer. Aesop at the time had 60 retail locations in 11 countries. Natura acquired 65% stake in Aesop for approximately $48 million in cash.
Five years later, came a bigger move from Natura: Acquisition of The Body Shop. This transaction was worth $1.1 billion. The Body Shop was founded in the UK in 1976 and was operating 3,000 stores in 66 countries at that time.
Obviously, the most sensational of all of Natura’s moves was the addition of Avon to its family of companies. After rejecting Mary Kay’s, Amway’s and Coty’s offers in years, Avon this time chose to accept Natura’s .
The news started leaking in during 2018. In May, it was reported that Natura would pay $2 billion for the transaction that would be completed in January 2020. Including debt, the transaction was valued at $3.7 billion, the company said.
The new entity that included Natura, Avon, The Body Shop and Aesop was named “Natura &Co”. Natura &Co’s 2022 consolidated group revenues were approximately $6.9 billion.
Then in April 2023, both L’Oreal and Natura announced that Aesop was acquired by L’Oreal at an enterprise value of $2.5 billion.
Betterware – Jafra
One noteworthy M&A transaction in 2022 was Betterware de Mexico’s acquisition of Jafra’s US and Mexico operations from Vorwerk. The transaction involved a combination of $225 million in debt financing and $30 million cash. In 2021, Jafra’s revenues were approximately $300 million.
Amare – Kyani
In late 2022, we saw this time Amare Global’s announcement that it had acquired Kyäni. Kyäni was founded in 2006 and at that time, had operations in over 50 countries.
This two-part article encompasses some of the more striking M&A stories in the global direct sales arena. Yet there were several others. For instance Avon acquired the UK-based skin care company Liz Earle and USANA bought the Chinese company, Babycare in 2010. These were followed by Zija’s acquisition of Xango in 2017. Then in 2020, Isagenix bought Zija.
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Hakki Ozmorali is the Founder of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki Ozmorali is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.
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