LG H&H will acquire Cerberus’ majority stake in Avon North America as well as Avon Worldwide‘s minority stake.
Michael F. Sanford, co-head of private equity and senior managing director at Cerberus, added: "LG H&H is a global leader in cosmetics and beauty products, its commitment to investing in the Avon brand and product lines makes LG H&H a great long-term home for Avon North America."
“LG H&H respects and admires our strong community of representatives, and supports our mission to empower women through economic opportunity. We are thrilled to welcome our new partner, who shares our commitment to innovation and our clear focus on putting customers first.” Laurie Ann Goldman, CEO of Avon North America, said.
The companies said that they expected the deal to close on September 30.
LG strengthens international presence
LG H&H said that this acquisition would support the company’s plans to strengthen its international expansion.
“After the acquisition, we will upgrade Avon’s product line with our superior R&D technology and product planning capabilities,” the company said in a statement.
The company added that it could leverage on Avon’s strong infrastructure in IT, purchasing, logistics, sales, and general management.
“We plan to use the North American infrastructure as a bridge to secure the place of our brands in the US market.”
Brands in the LG H&H portfolio include The History of Whoo, s:um37 and belif.
Additionally, the company said the investment in Avon was part of its plan to invest in the US, which puts it in a strategic position to expand to other major global markets such as Canada, South America and Europe.
With support from the K-beauty giant, Avon hopes to strengthen its position as a leading ‘social selling beauty company’.
“Avon North America’s innovative social selling model builds deep connections with customers and we are excited to leverage this as we continue to expand. We look forward to building on Avon North America’s success to drive customer engagement and long-term growth in this market,” said CEO of LG H&H, Suk Cha.
Avon North America currently operates in the US, Canada and Puerto Rico. According to LG H&H, the company achieved KRW770bn ($603m) in sales last year.
Snapshot of Avon history
In 2016, Avon North America separated from Avon Products to form a privately-held company majority-owned and managed by Cerberus.
Cerberus invested $170m for an 80% stake in Avon while Avon Products retained 20% ownership.
"We have appreciated our partnership with Cerberus over the last three years and their support as we strengthened the company and reset our path toward long-term success.” said Goldman.