Alberto-Culver Co. has agreed to acquire U.K.-based skin care brand Simple Health & Beauty Ltd. for $240 million pounds, or $389.8 million at current exchange, from private equity firm Duke Street.
This story first appeared in the December 15, 2009 issue of WWD. Subscribe Today.
The deal is expected to close by the end of this month.
The buy stands to bolster Alberto-Culver’s skin care portfolio, which includes St. Ives and Noxzema. The latter was acquired from Procter & Gamble Co. in 2008. Alberto-Culver also manufactures and markets the TRESemmé, Alberto VO5 and Nexxus hair care brands.
Alberto-Culver said it will fund the transaction “substantially from existing cash.” As of Sept. 30, its cash, cash equivalents and short-term investments stood at $469.8 million. Net sales of Simple, which was launched nine years ago, are projected to be about 65 million pounds, or $105.6 million, for 2009, Alberto-Culver noted, calling the firm “a strong skin care brand with a unique market position that is distributed in mass outlets.”
“I am very pleased with the opportunity to complete a transaction that gives us a brand well known and respected in its market and a business that will be immediately accretive for Alberto-Culver,” stated V. James Marino, president and chief executive officer of Alberto-Culver. “I’ve admired the tremendous job that the management team has done in growing the business and we’ll continue to leverage Simple’s brand strength to drive future growth.
“This transaction reaffirms our overall focus on beauty care,” Marino added, “while moving us an important step forward in executing our strategy of expanding and strengthening our skin care portfolio.”
The U.K. is the largest international market for Melrose Park, Ill.-based Alberto-Culver.
Duke Street, which has offices in London and Paris, manages about 2 billion euros, or $2.93 billion, in funds. The firm noted that since it acquired Simple in 2004, the business has grown 15 percent a year. Citing Information Resources data, it called Simple the number-one female facial skin care brand in the U.K. based on unit sales.
“Two periods of private equity ownership and investment have been the engine of our remarkable growth, along with the exceptional talent and commitment of our employees,” stated Geoff Percy, ceo of Simple. “Being owned by an entrepreneurial global business now gives us the opportunity for significant domestic and international growth.”
After the deal is finalized, Alberto-Culver said it will become the number-two manufacturer in the U.K. in skin care, which will complement its existing number-two position in hair care.