Perfumania Holdings and Parlux Fragrances have signed a definitive merger agreement, under which Perfumania will acquire all of the outstanding shares of Parlux in a transaction valued at approximately US$170 million, based on Perfumania’s closing stock price of US$19.55 per share on 22 December 2011.
The merger agreement values a share of Parlux stock at between US$7.91 and US$8.55. Parlux’s closing market price on 22 December 2011 was US$3.40 per share; there were 20,769,362 shares of Parlux common stock outstanding on that date.
Perfumania is a national, vertically integrated wholesale distributor and specialty retailer of designer fragrances. Parlux is a manufacturer and international distributor of prestige fragrances and beauty related products and is one of Perfumania’s largest trading partners. Its brands includes Jessica Simpson, Paris Hilton, Nicole Miller, Queen Latifah and Rihanna.
The strategic transaction, which is expected to create a more efficient and competitive company that will provide greater value to stockholders and better service to the parties’ customers, has been unanimously approved by the independent committees of the Boards of Directors of both companies. It is subject to customary closing conditions, including Hart-Scott-Rodino clearance and approval of the stockholders of both companies, but is not subject to any financing condition. The merger is expected to close in the first half of 2012.
Perfumania President and Chief Executive Officer Mike Katz commented: “The combination of Perfumania and Parlux is a major step toward building a more significant and financially stronger designer fragrance and beauty products company. Parlux brings a wealth of products and expertise as a licensee, manufacturer and international distributor.”
Parlux Chairman and Chief Executive Officer Fred Purches added: “The Parlux management team and Board of Directors are focused on maximising value for stockholders. This combination achieves that objective by providing our shareholders with a significant premium over the current trading price for their shares as well as the ability to participate in the anticipated growth of a significantly stronger, combined company that is well positioned to deliver long-term value to stockholders and a broader range of product to its valued customers.”
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