Natura confirms Avon Products deal with combined group's enterprise value $11B
Natura &Co announces that it is acquiring Avon Products in an all-share transaction "The group will hold leading positions in relationship selling through Avon's and Natura's over 6.3M consultants and representatives, a global footprint through 3,200 stores, as well as an expanded digital presence across all companies. The combined Group is expected to have annual gross revenues of over US$10B, over 40,000 associates and be present in 100 countries. Natura &Co expects the combination to result in target synergies estimated at $150M to $250M annually, some of which will be reinvested to further enhance capabilities in digital and social selling, research & development and brand initiatives and to continue to grow the Group's geographic footprint. As part of this transaction, a new Brazilian holding company, Natura Holding S.A., has been created. Based upon the fixed exchange ratio of 0.300 Natura Holding shares for each share of Avon common stock, Natura &Co's shareholders will own approximately 76% of the combined company, while Avon common shareholders will own approximately 24%. Based on Natura's undisturbed closing price on March 21, one day prior to Natura issuing the Material Fact confirming negotiations between Avon and Natura, the transaction represents a 28% premium to Avon shareholders and implies a 2018 EBITDA multiple of 9.5x or 5.6x assuming the full impact of Natura's expected synergies. Based on closing prices on May 21, the transaction values Avon at an enterprise value of $3.7B and the combined group would have an enterprise value of approximately US$11 billion. Upon closing, Natura Holding S.A.s' stock will be listed on B3 with a 55% public float and it will also have ADRs listed on the NYSE. Avon shareholders will have the option to receive ADRs traded on the NYSE or shares listed on B3," said the company.