JAPAN. Shiseido is to acquire the Bare Escentuals beauty brand, a leader within mineral-based cosmetics, for around US$1.7 billion, through an all-cash tender offer and second-step merger. The transaction has been approved by the Boards of Directors of both companies.
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Shiseido, through a US subsidiary, will make an offer to purchase all outstanding shares of Bare Escentuals common stock for US$18.20 per share. The tender offer price represents a 40.8% premium to Bare Escentuals’ average closing stock price over the last three-month period ended 13 January 2010, and a 39.9% premium over the closing price of Bare Escentuals’ common stock on 13 January 2010. The tender offer is expected to close during the first quarter of this year.
The offer is conditioned on the tender of a majority of the outstanding shares of Bare Escentuals common stock on a fully-diluted basis, the continued employment of Leslie Blodgett, the Chief Executive Officer of Bare Escentuals, and various other conditions, including customary regulatory approvals. The transaction is not conditional on financing.
Bare Escentuals’ business will operate as a separate division of Shiseido and its brands will continue to be managed by the current leadership team who are expected to drive future development of the business with the support of Shiseido’s significant resources, particularly given Shiseido’s extensive R&D network around the world.
The transaction will expand Shiseido’s brand portfolio into the mineral-based cosmetics market, attracting a wider customer base, while creating a complementary multi-channel and truly global distribution network, giving Bare Escentuals greater access to Japan, one of the world’s largest cosmetics markets, as well as other fast-growing Asian markets such as China.
It will also strengthen Shiseido’s US and European business and maximise both companies’ production capabilities and R&D resources.
Shiseido President & CEO Shinzo Maeda commented: “This acquisition further enables Shiseido to move towards our goal of becoming a global player representing Asia with its origins in Japan. We have known and admired Bare Escentuals’ excellent team and their achievements for a long time, and look forward to their contribution to our combined group. The operational fit and future growth prospects make this an excellent transaction for our customers, employees and shareholders.”
Blodgett added: “This is an exciting [time] for all of us at Bare Escentuals and I couldn’t be more pleased to be joining forces with the team at Shiseido. First and foremost, I would like to thank our talented employees, our channel partners, and our loyal customers who have helped build Bare Escentuals from a small niche brand into one of the world’s leading prestige cosmetics companies. Together with Shiseido, we look forward to bringing our mineral-based beauty products to even more women worldwide.”
Note: Bare Escentuals is one of the leading prestige cosmetics companies in the US and an innovator in mineral-based cosmetics. The company develops, markets and sells cosmetics, skin care, and body care products under well-known brand names that include the popular bareMinerals brand. With over 85% of its revenue generated in the US through retail and direct sales, as a result of this transaction, the company’s international expansion is expected to gain further momentum and will specifically benefit from the growth potential in the highly attractive Chinese and broader Asian markets where Shiseido has a strong foothold.
Shiseido is Japan’s largest cosmetics company, with operations in over 70 countries worldwide. This transaction is consistent with the company’s roadmap revealed in 2008 for the coming decade which will see Shiseido move from a leading position in Asia to a global player representing Asia with its origins in Japan. Shiseido is already among the top three cosmetics brands in China and other Asian markets and has been steadily increasing its global diversification. Shiseido has gained prominence in the US retail market since the 1960s and operates several R&D facilities in the US. Bare Escentuals’ market-leading position will not only complement and strengthen Shiseido’s existing US business, but will also form one of the strategic pillars of Shiseido’s global business platform, taking advantage of the growing global demand for natural cosmetics.
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