How Is Revlon Expecting To Benefit From The Elizabeth Arden Deal?
Last month, Revlon announced its decision to acquire premium cosmetics company Elizabeth Arden for $870 million. The transaction, expected to be completed by the end of 2016, will help Revlon enter the premium beauty segment, expand its offerings portfolio, and further its geographical reach. Below we explore the possible implications of this deal as explained by Revlon in a recent investor filing.
- The most interesting change in Revlon’s portfolio mix post the acquisition is expected to be the contribution of the fragrance segment. Fragrance, that so far made around a 4% contribution to Revlon’s category mix, is expected to have almost 30% contribution to the category mix post the completion of the Elizabeth Arden deal.
- Color Cosmetics and Haircare, the two biggest contributors to Revlon’s portfolio, will both have a lesser contribution than before in the combined entity of Revlon and Elizabeth Arden.
- The geographic mix on the other hand might not change a lot due to the deal.
- The synergy from the acquisition is expected to reduce Revlon’s SG&A Costs by 40%, COGS by 60%, amounting to a total savings of around $140 million.
- According to a previous statement by Revlon’s CEO Fabian Garcia, this deal will place Revlon among the top 20 global beauty companies.
- The combined business is expected to generate ~$3 billion in annual sales and $517 million in annual adjusted EBITDA.
Have more questions on Revlon? See the links below.
- What Is Revlon’s Fundamental Value On The Basis Of Its Forecasted 2015 Results?
- How Has Revlon’s Revenue And EBITDA Composition Changed Over 2012-2016E?
- What Is Revlon’s Revenue And EBITDA Breakdown?
- Revlon: 2015 Year In Review
- What Is Revlon’s Fundamental Value Based On 2016 Estimated Numbers?
- How Has The TCG Acquisition Boosted Revlon’s Growth?
- How Did Revlon’s Different Segments Perform Over The Last 5 Years?
- Revlon’s Q1 2016 Earnings Results
- What Are The Implications Of Revlon’s Acquisition Of Cutex International Business?
- Revlon’s Expected Revenue And EBITDA For 2016: Trefis Estimate
- How Might The Acquisition Of Elizabeth Arden Help Revlon?
- How Is Revlon’s Revenue Composition Expected To Trend?
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Revlon