"Silpada has enjoyed strong growth, and we expect that our new partnership with Avon will help us to accelerate the growth of our brand throughout the United States and Canada, as well as expand globally with assistance from one of the world's most dedicated and respected women's brands," said Jerry Kelly, Silpada's Chief Executive Officer and Co-founder. "We will also be able to provide even better support and resources to our representatives and customers through this partnership."
The transaction will be structured as an all-cash, asset acquisition. Under the agreement, Avon is expected to acquire the assets of Silpada for an initial payment of approximately $650 million, and will make a potential additional payment in early 2015 to the current Silpada shareholders if certain earnings growth targets are achieved. Avon said that it expects the acquisition to be accretive to earnings by $0.03 to $0.05 per share in 2011.
Centerview Partners LLC acted as financial advisor and Sullivan & Cromwell LLP acted as legal advisor to Avon. Lazard Middle Market LLC acted as financial advisor and Lathrop & Gage LLP acted as legal advisor to Silpada.
Avon, the company for women, is a leading global beauty company, with over $10 billion in annual revenue. As the world's largest direct seller, Avon markets to women in more than 100 countries through approximately 6.2 million independent Avon Sales Representatives. Avon's product line includes beauty products, as well as fashion and home products, and features such well-recognized brand names as Avon Color, Anew, Skin-So-Soft, Advance Techniques, Avon Naturals, and Mark.
Silpada Designs is the world's largest and fastest-growing sterling silver jewelry home party company. Silpada Design's sterling silver jewelry is sold exclusively by 32,000 independent representatives throughout the United States, Canada and the United Kingdom.
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