PARIS — The market reacted positively Friday to Unilever’s announcement that it will acquire 82 percent of Concern Kalina, Russia’s leading beauty maker, for about 16.7 billion rubles, or $541 million at current exchange. It’s a move meant to bolster the Anglo-Dutch company’s personal care business there.
Unilever stock closed up 2.5 percent on the London Stock Exchange to 21.09 pounds, or $33.37 at current exchange.
The deal, which values the equity of Kalina’s total business at 21.5 billion rubles, or $696.6 million, is pending required regulatory approval.
The company, based in Yekaterinburg, Russia, is the country’s largest homegrown personal care maker, with leading positions in skin and hair care. Its projected revenues for 2011 are 13 billion rubles, or $421.2 million. Kalina sells its products mostly in Russia, Ukraine and Kazakhstan and has approximately 1,900 employees.
Of the acquisition, Unilever chief executive officer Paul Polman stated, “This will transform Unilever’s personal care business in Russia, giving us leading positions in skin care and hair care, as well as establishing a presence in oral care. It will also strengthen and rebalance Unilever’s portfolio and competitive position in Russia, an emerging market with considerable potential and one of our priority countries.”
On Friday, the financial community generally lauded Unilever’s acquisition of Kalina.
“Strategically, I think it signals [Unilever’s] intent to build their business in personal care in developing and emerging markets,” said Martin Deboo, consumer goods analyst at Investec Securities in London, adding that the acquisition contributes toward Unilever’s goal of doubling the size of its business in a decade.
Deboo said the deal metrics, where Unilever paid just under 12 times Kalina’s earnings before interest, taxes, depreciation and amortization are “very sensible.”
“I think that’s a very good price,” he continued. “I’d have some confidence that they can unlock synergies from the deal. The sort of things they are talking about are combining their relatively small skin care sales force in Russia with Kalina’s, with getting some cost-synergy there, probably bringing some of their global best-practices and things like procurement and manufacturing to bear on Kalina and then over time feeding some of their global brands like Pond’s through into the Kalina distribution system.”
In 2010, Kalina’s sales were 11.7 billion rubles, or $386.2 million at average exchange for the period. At constant group structure, revenue growth was close to 15 percent.
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)