SÃO PAULO and LONDON,
22 May 2019 /PRNewswire/
-- Natura &Co (B3: NATU3) announces that it is acquiring
Avon Products, Inc. (NYSE: AVP) in an all-share transaction,
creating the fourth-largest pure-play beauty group in the world and
a major force for good in the industry.
The combination creates a best-in-class multi-brand and
multi-channel beauty group, with direct connections to consumers on
a daily basis. The group will hold leading positions in
relationship selling through Avon´s and Natura's over 6.3 million
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$10 billion, over
40,000 associates and be present in 100 countries.
Leveraging its iconic brands, common passion for relationships, and
its omnichannel capabilities, the expanded group will bring beauty
to over 200 million consumers across the world, anytime, anywhere,
every day. By adding Avon to a
portfolio that already includes Natura, The Body Shop and Aesop,
Natura &Co will enhance its ability to better serve its
different consumer profiles and distribution channels and expand
into new geographies.
Avon and Natura were both founded
by mission-driven individuals, reaching customers through a force
of independent, primarily female micro-entrepreneurs, who act as
brand ambassadors and beauty advisors. Avon is an iconic brand with a heritage of
over 130 years and is the world's leading relationship selling
beauty platform. Its strong brands across key beauty categories and
competitive positions in a number of markets give it significant
potential for future growth.
Natura &Co expects the combination to result in target
synergies estimated at US$150 million
to US$250 million 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.
Luiz Seabra, Co-Founder of
Natura, declared: "We have always looked at Avon with respect and admiration. Natura was
founded on its passion for beauty and relationships, and today's
transaction creates a major force in the direct-to-consumer space.
Direct selling was a social network before the word even existed,
and the arrival of technology and globalization only multiplied
opportunities to connect with consumers in a meaningful way. The
peer-to-peer sales model is evolving towards social selling and the
power of digital allows the group to go beyond providing products
and advice, and advances women empowerment, through financial
independence and enhanced self-esteem. We believe that
business can be a force for good and together with Avon, we will amplify our pioneering efforts
to bring social, environmental and economic value to an
ever-expanding network."
Roberto Marques, Executive
Chairman of Natura &Co, declared: "Following the acquisitions
of Aesop in 2013 and The Body Shop in 2017, Natura & Co is
taking another exciting, decisive step to build a global,
multi-brand, multi-channel, purpose-driven Group. Avon is an
amazing company, an iconic brand, with passionate associates and
over five million Representatives who also believe in the power of
relationships. Together we will enhance our growing digital
capabilities, our social network of Consultants and Representatives
and leverage our global store footprint and distinctive brands,
connecting, touching and influencing millions of consumers with
different profiles daily, making our Group unique and creating a
formidable platform for growth."
Jan Zijderveld, CEO of
Avon, said: "This combination is
the start of an exciting new chapter in Avon's 130-year history. It stands as a
testament to the progress of our efforts to 'Open Up Avon', and we
believe it will allow us to significantly accelerate our strategy
and further expand into the online channel. Over the past year, we
have started a transformation to strengthen Avon's competitiveness by renewing our focus
on Her, simplifying our operations, and modernizing and digitizing
our brand. Together with Natura, we will have broader access to
innovation and a portfolio of products, a stronger e-commerce and
digital platform, and improved data and tools for Representatives
to drive growth and enhance value for shareholders. Further, with
the support of Natura, we will continue to invest in cutting-edge
technology to enhance our digital capabilities and productivity for
our Representatives. Both Avon and
Natura are purpose-driven organizations, and the combination will
enable us to better serve our millions of Representatives,
leveraging Avon's international
presence with the same strongly-held commitment to enhancing Her
experience and earnings."
Chan Galbato, Non-Executive
Chairman of Avon said: "Our focus
has been to enhance the Representative experience, accelerate
international expansion, improve our cost structure, increase
financial flexibility, and ultimately position the company for
long-term growth and success. The Board is committed to enhancing
value for shareholders and this combination with Natura represents
a new era of future growth for Avon. The Avon Board is confident that Natura will be a
powerful partner for the Avon brand, while providing more scale,
operations and expanded opportunities for employees and
Representatives, and tremendous upside potential to both sets of
shareholders. We are pleased to support this transformational
combination."
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,
2019, 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, 2019, the
transaction values Avon at an
enterprise value of US$3.7 billion
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. Further information is available in
the Material Fact which can be accessed through the following link
https://natu.infoinvest.com.br/ptb/7085/19550_691987.pdf
Upon closing, the Board of Directors of the combined company
will consist of 13 members, 3 of which will be designated by
Avon. The transaction remains
subject to customary closing conditions including approval by both
Natura &Co's and Avon's
shareholders as well as anti-trust authorities in Brazil and certain other jurisdictions.
Closing is expected in early 2020.
UBS Investment Bank and Morgan Stanley acted as financial
advisors to Natura &Co. Goldman Sachs acted as financial
advisor to Avon and PJT Partners
acted as financial advisor to members of the Avon Board of Directors.
Conference Call and Webcast
NATURA &Co will host a conference call and webcast on
Thursday, May 23 at 9:00 AM BRT, 8:00 AM
EST to discuss the transaction.
The conference call can be accessed by dialing +55 11
3193-1001 or +55 11 2820-4001 for Brazil, +1-646-828-8246 or Toll Free:
1-800-492-3904 for USA and
Canada and +44 20 7442-5660 or
Toll Free 0-808-111-0152 for United
Kingdom. The confirmation code is Natura. Participants
should dial in 10 minutes prior to the scheduled start time.
A live webcast of the conference call and associated
presentation materials will be available in the investor relations
section of each company's website at
http://choruscall.com.br/natura/extramay.htm
About NATURA &CO
Resulting from the combination of Natura, Aesop and The Body
Shop, the corporate brand Natura &Co consolidates the creation
of a global, multi-channel and multi-brand cosmetics group that is
driven by purpose. The three companies that form the group are
committed to generating positive economic, social and environmental
impact. Founded in 1969, Natura is a Brazilian multinational in the
cosmetics and personal care segment, leader in direct sales.
Founded in 1976 in Brighton,
England, by Anita Roddick,
The Body Shop is a global beauty brand that seeks to make a
positive difference in the world. The Australian beauty brand Aesop
was established in 1987 with a quest to create a range of
superlative products for skin, hair and the body.
About Avon Products, Inc.
For 130 years Avon has stood
for women: providing innovative, quality beauty products which are
primarily sold to women, through women. Millions of independent
Representatives across the world sell iconic Avon brands such as
Avon Color and ANEW through their social networks, building their
own beauty businesses on a full- or part-time basis. Avon supports women's empowerment,
entrepreneurship and well-being and has donated over $1 billion to women's causes through Avon and the Avon Foundation. Learn more about
Avon and its products at
www.avonworldwide.com. #Stand4Her.
Media enquiries Natura &Co:
Marcelo Behar, Corporate Affairs Officer Natura
&Co
natura@brunswickgroup.com
Investor Relations Natura &Co:
Viviane Behar de Castro, Investor Relations
Director, Natura &Co
RI@natura.net
Media inquiries Avon:
Natalie
Deacon, Executive Director Communications, Avon Products,
Inc.
+ 44(0) 7725 150853
Email: media.enquiries@avon.com / natalie.deacon@avon.com
Investor Relations Avon:
Amy
Greene, Vice President, Investor Relations, Avon Products,
Inc.
+ 001 212 282 5320
Email: amy.greene@avon.com
NO OFFER OR SOLICITATION
This communication is for informational purposes and does not
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote or approval, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of such
jurisdiction.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication is being made in respect of the proposed
transaction involving Natura Holding
S.A. (collectively with Natura Cosmeticos S.A., "Natura")
and Avon Products, Inc. ("Avon").
In connection with the proposed transaction, Natura will file with
the Securities and Exchange Commission ("SEC") a registration
statement on Form F-4 that will include a proxy statement of
Avon and a prospectus of Natura.
Natura and Avon also plan to file
other documents with the SEC regarding the proposed transaction and
a joint proxy statement/prospectus will be mailed to shareholders
of Avon. This communication is not
a substitute for any proxy statement, registration statement, proxy
statement/prospectus or other documents that Natura and/or
Avon may file with the SEC in
connection with the proposed transaction. BEFORE MAKING ANY VOTING
OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE FORM F-4
AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED
TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The Form F-4
and the joint proxy statement/prospectus, as well as other filings
containing information about Natura and Avon, will be available without charge at the
SEC's Internet site (www.sec.gov). Copies of the joint proxy
statement/prospectus can also be obtained, when available, without
charge, from Natura's website at www.NaturaeCo.com. Copies of the
joint proxy statement/prospectus can be obtained, when available,
without charge from Avon's website
at www.AvonWorldwide.com.
PARTICIPANTS IN THE SOLICITATION
Natura and Avon, their
respective directors, executive officers and other members of their
management and employees may be deemed to be participants in the
solicitation of proxies in connection with the proposed
transaction. Information regarding the persons who may, under the
rules of the SEC, be deemed participants in the solicitation of
proxies in connection with the proposed transaction, including a
description of their direct or indirect interests, by security
holdings or otherwise, will be set forth in the joint proxy
statement/ prospectus and other relevant materials when they are
filed with the SEC. Information regarding the directors and
executive officers of Natura is contained in Natura's Reference
Form for 2018, version 15, which was filed with the Brazilian
Securities Commission on April 24,
2019. Information regarding the directors and executive
officers of Avon is contained in
Avon's definitive proxy statement
for its 2019 annual meeting of shareholders, filed with the SEC on
April 2, 2019. These documents can be
obtained free of charge from the sources indicated above.
CAUTION ABOUT FORWARD-LOOKING STATEMENTS
Statements in this communication (or in the documents it
incorporates by reference) that are not historical facts or
information may be forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Among other
things, these forward looking statements may include statements
regarding the proposed transaction involving Natura and
Avon; beliefs relating to value
creation as a result of a proposed transaction involving Natura and
Avon; the expected timetable for
completing the transaction; benefits and synergies of the
transaction; future opportunities for the combined company; and any
other statements regarding Avon's
and Natura's future beliefs, expectations, plans, intentions,
financial condition or performance. In some cases, words such as
"estimate," "project," "forecast," "plan," "believe," "may,"
"expect," "anticipate," "intend," "planned," "potential," "can,"
"expectation," "could," "will," "would" and similar expressions, or
the negative of those expressions, may identify forward-looking
statements. These forward-looking statements are based on Natura's
and Avon's expectations and
beliefs concerning future events and involve risks and
uncertainties that may cause actual results to differ materially
from current expectations. These factors are difficult to predict
accurately and may be beyond Natura's and Avon's control. Forward-looking statements in
this communication or elsewhere speak only as of the date made. New
uncertainties and risks arise from time to time, and it is
impossible for Natura or Avon to
predict these events or how they may affect Natura or Avon. Therefore, you should not rely on any of
these forward-looking statements as predictors of future events.
Except as required by law, neither Natura nor Avon has any duty to, and does not intend to,
update or revise the forward-looking statements in this
communication or elsewhere after the date this communication is
issued. In light of these risks and uncertainties, investors should
keep in mind that results, events or developments discussed in any
forward-looking statement made in this communication may not occur.
Uncertainties and risk factors that could affect Natura's and/or
Avon's future performance and
cause results to differ from the forward-looking statements in this
communication include, but are not limited to, (a) the parties'
ability to consummate the transaction or satisfy the conditions to
the completion of the transaction, including the receipt of
shareholder approvals and the receipt of regulatory approvals
required for the transaction on the terms expected or on the
anticipated schedule; (b) the parties' ability to meet expectations
regarding the timing, completion and accounting and tax treatments
of the transaction; (c) the possibility that any of the anticipated
benefits of the proposed transaction will not be realized or will
not be realized within the expected time period; (d) the risk that
integration of Avon's operations with those of Natura will be
materially delayed or will be more costly or difficult than
expected; (e) the failure of the proposed transaction to close for
any other reason; (f) the effect of the announcement of the
transaction on customer and consultant relationships and operating
results (including, without limitation, difficulties in maintaining
relationships with employees or customers); (g) dilution caused by
Natura's issuance of additional shares of its common stock in
connection with the transaction; (h) the possibility that the
transaction may be more expensive to complete than anticipated,
including as a result of unexpected factors or events; (i) the
diversion of management time on transaction-related issues; (j) the
possibility that the intended accounting and tax treatments of the
proposed transactions are not achieved; (k) those risks described
in Section 4 of Natura's Reference Form for 2018, version 15, which
was filed with the Brazilian Securities Commission on April 24,
2019; and (l) those risks described in Item 1A of Avon's most
recently filed Annual Report on Form 10-K and subsequent reports on
Forms 10-Q and 8-K.
View original
content:http://www.prnewswire.com/news-releases/natura-co-and-avon-join-forces-to-create-a-direct-to-consumer-global-beauty-leader-300855545.html
SOURCE Natura &Co