NEW YORK (AP) — Revlon Inc. said Thursday it is buying Elizabeth Arden Inc. for about $419.3 million in cash, a deal uniting two well-known names in the world of beauty and cosmetics.
The New York company is paying $14 for each Elizabeth Arden share, a premium of 50 percent over their closing price Thursday. The companies value the deal at $870 million including debt.
Revlon said the combined company will benefit from having a presence in more markets worldwide. It expects savings of about $140 million from the combination.
Company founder Elizabeth Arden opened her first Red Door salon on New York's Fifth in 1910. The company, now based in Miramar, Florida, sells skin-care and fragrance products in 120 countries. It was in the midst of trying to turn its business around and posted a loss of $28.4 million on revenue of $191.9 million in its most recent quarter.
Revlon was founded in 1932 with the launch of nail enamel. It posted a first-quarter profit of $11 million on sales of $439.6 million. It has a new chief executive, Fabian Garcia, who came over from Colgate-Palmolive in April.
Scott Beattie, Elizabeth Arden's chairman, president and chief executive, will join the Revlon board as non-executive vice chairman and serve as senior adviser to Garcia.
The companies expect the deal to close this year.
Elizabeth Arden shares jumped $4.67, or 50 percent, to $13.98 in aftermarket trading after the deal was announced. Revlon tacked on 15 cents, or 0.5 percent, to $31.30.