Luxury cosmetics firm L'Occitane International agreed to buy privately held beauty and skincare brand Elemis for about $900 million as it seeks to build its presence in the UK and the US.
The Hong Kong-listed company agreed to buy Elemis USA from Steiner Leisure, an international business firm incorporated under Bahamas laws, and Elemis, a firm incorporated in England and Wales, from private firm Nemo UK, according to a Hong Kong Stock Exchange filing on Sunday.
L'Occitane, based in France, said the acquisition will help bolster the group's growth globally and Elemis will leverage on the acquirer's geographical presence to expand into new markets, according to Bloomberg. The buyer has a global presence in 90 countries, 3,285 retail outlets, including 1,555 stores directly operated by the group, and more than 8,500 employees, according to its website.
The purchase will be funded by L'Occitane's cash and bank borrowings. The deal is expected to close in the first quarter of 2019, according to the filing.
"This is L'Occitane's largest acquisition since listing and a major step forward in building a group of premium beauty brands," said Reinold Geiger, chief executive of the firm.
L'Occitane, which reported €1.3 billion (Dh5.47bn) in net sales and €141m in operating profit last fiscal year, listed in Hong Kong in 2010 as it sought to expand in Asia. The firm is a natural ingredients-based cosmetic products maker with origins in Provence, France.
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Shares of L’Occitane have advanced 6.6 per cent this year, giving the company a market value of $2.9bn. The stock was little changed in 2018.
The news comes after cosmetics and fragrance maker Coty announced a major management shake-up at the weekend, two months after the CoverGirl and Max Factor brand owner appointed a new chief executive as it grapples with supply chain issues.
The company, which handed over the reins to Pierre Laubies in November, on Friday named Luc Volatier as head of its global supply chain and Pierre-André Terisse as chief financial officer. Mr Laubies was previously CEO of coffee company JDE, which is owned by consumer goods conglomerate JAB Holding, Reuters said. JAB is the biggest shareholder of Coty.
Coty last year warned that its full-year performance would be hit by supply chain disruptions from a trucker strike in Brazil, hurricanes in the Unites States and a warehousing issue in Germany.
The warning resulted in a 67 per cent decline for the stock in 2018. The company's shares rose as much as 4 per cent to $7.47 during regular trading on Friday.
