In Brands, Finance

LG Household & Health Care has entered into a definitive agreement with an affiliate of Cerberus Capital Management, L.P. and Avon Worldwide to acquire Avon North America for $125 million in cash. LG will acquire the entirety of Cerberus’ majority interest and Avon Worldwide’s minority interest in Avon North America.

WHO: Avon North America is the leading social selling beauty company in North America, with independent sales Representatives throughout the United StatesPuerto Rico, and Canada. Avon North America’s portfolio includes award-winning skincare, color cosmetics, fragrance, personal care, and health and wellness products featuring brands such as ANEW, Avon True Color, Espira, and Skin So Soft, as well as fashion and accessories. Avon has a 133-year history of empowering women through economic opportunity, and supporting the causes that matter most to women.

Founded in 1992, Cerberus is a global leader in alternative investing with approximately $39 billion in assets across complementary credit, private equity, and real estate strategies. The company invests across the capital structure where its integrated investment platforms and proprietary operating capabilities create an edge to improve performance and drive long-term value. Their tenured teams have experience working collaboratively across asset classes, sectors, and geographies to seek strong risk-adjusted returns for our investors.

LG Household & Health Care is Korea’s leading consumer goods company, with strong market positions in all major categories including cosmetics, personal care, and home care. Korea is one of the world’s largest and most innovative beauty markets, with over $13.1 billion in sales in 2018. LG H&H currently distributes a number of its brands in the US, including belif and The History of Whoo.

WHY: The addition of Avon North America will support LG H&H’s international growth plans.

IN THEIR OWN WORDS: Suk Cha, CEO of LG Household & Health Care, said, “We recognize Avon North America’s strong brand, leading market position in the region, and talented employees and Representatives. Avon North America’s innovative social selling model builds deep connections with customers and we are excited to leverage this as we continue to expand. We look forward to building on Avon North America’s success to drive customer engagement and long-term growth in this market.”

“LG H&H respects and admires our strong community of Representatives, and supports our mission to empower women through economic opportunity,” said Laurie Ann Goldman, CEO of Avon North America. “We are thrilled to welcome our new partner, who shares our commitment to innovation, and our clear focus on putting customers first. We have appreciated our partnership with Cerberus over the last three years and their support as we strengthened the company and reset our path toward long-term success.”

Michael F. Sanford, Co-Head of Private Equity and Senior Managing Director at Cerberus, added, “LG H&H is a global leader in cosmetics and beauty products, its commitment to investing in the Avon brand and product lines makes LG H&H a great long-term home for Avon North America.”

DETAILS: 

  • LG H&H will acquire the entirety of Cerberus’ majority interest and Avon Worldwide’s minority interest in Avon North America for $125 million in cash.
  • The transaction has been approved by the LG H&H Board of Directors.
  • Kirkland & Ellis LLP acted as legal counsel to Avon North America for the deal.
  • In 2016, Cerberus purchased an 80.1% interest in Avon North America in exchange for a $170 million equity investment and the business was separated from Avon Products into a privately held company.
  • Cerberus also took a stake in Avon Products as part of the 2015 transaction, which it will keep, even as it sells the North America business.

Photo: via Avon

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