Revlon to undergo a “makeover”?

The announcement of MacAndrews & Forbes, the investment company of billionaire Ron Perelman, that it was exploring “strategic alternatives” in relation to its 77.6 per cent stake in Revlon Inc, would, if resulting in a full sale of its holding, bring to a close a 30+ year relationship between the two organisations.

In 1985, Perelman made Revlon his biggest ever investment at that time, but not without a brief bidding war between Perelman and Forstmann Little & Company, unsupportive Revlon shareholders and a reported USD 900m + in associated costs whilst trying to conclude the deal! Revlon took many years to turn a profit for Perelman, believed to be as a direct result of his financing the acquisition using junk bonds and loading Revlon with a debt burden. Should a deal proceed, then this would be a second long-established US cosmetics company to change hands in as many months, following on from the 80.1 per cent stake Cerebus Capital acquired in Avon’s North American business in December 2015.

Consolidation in the broader “cosmetics” industry continued at a pace in 2015, with 222 deals accounting for over USD 25bn in deal values, the highest ever total record in the Zephyr deal database and eclipsing the previous highest figure of USD 20bn recorded in 2003, which was the last time the industry saw some of its biggest names such as Beiersdorf, Wella, Kanebo and Molton Brown, amongst others, being subject to high value deals.

Filed under: cosmetics, exit, investors, M&A, US, brands