Revlon opens purse for old flame

Cosmetics maker Revlon will buy Spanish beauty care company The Colomer Group for $660-million, reacquiring a business it sold 13 years ago.

Colomer Group, owned by CVC Capital Partners, manufactures and sells under licence products such as Revlon Professional to salons and other businesses.

Revlon sold the business to the Colomer family and CVC Capital Partners in 2000 for $315-million.

The Barcelona company, since renamed The Colomer Group, has expanded into consumer brands such as Natural Honey body lotions and Llongueras hair care. It gets 40% of its revenue from the US.

"Revlon's reentry into the professional salon channel comes at a time when its US colour cosmetics business is treading water," BMO Capital analyst Connie Maneaty said.

Revlon shares rose more than 8% to a seven-year high of $26.58 on the New York Stock Exchange yesterday.

"The Colomer Group's presence in the professional salon channel, which Revlon currently does not serve, will expand our product offering and enable us to reach new consumers," Revlon chief executive Alan Ennis said.

Revlon's revenue for the quarter to June 30 fell 2% to $350.1-million, hit by lower sales of its Almay colour cosmetics brand.

The Colomer Group has an annual revenue of $538-million.

The company is majority-owned by 70-year-old buyout titan Ronald Perelman. He learned the buyout business from his father, attending board meetings when he was in primary school, according to his Forbes page.

The deal is expected to close in the fourth quarter and be accretive to cash flow and earnings in the first year, Revlon said.