Coty to acquire Hypermarcas’ beauty unit for $1bn

US-based beauty products manufacturer Coty will acquire the beauty and personal care division of Brazilian conglomerate Hypermarcas S.A. for $1bn in cash.

The deal will be funded in a combination of cash on hand and available debt providing options. The deal would entail the acquisition of brands namely Monange, Risqué, Bozzano, Paixão, and Biocolor.

Monange is a personal care brand catering to specific categories of body care, hair care and female deodorant; Risque is a nail polish brand, while Bozzano is a men’s care brand. Paixão is a skin care brand and Biocolor is a hair colorant brand.

The beauty division includes manufacturing and distribution facilities in Goias state, enabled with mass-to-market capacities with a prolific management team, the company claims.

The acquisition is providing a platform to integrate the small Coty business with the larger Procter & Gamble Specialty Beauty business in Brazil.

The rest of the company is expected to be merged into Coty in the latter half of 2016, following certain customary clearances and closing conditions. The transaction is expected to be completed in two phases by the end of March 2016.

Coty chairman and interim CEO Bart Becht said: "We are excited to announce the acquisition of the Beauty Business of Hypermarcas, a leading beauty and personal care business in one of the world’s most important retail markets.

"We expect that the strength of the brands, the impressive leadership team and its robust infrastructure will enhance COTY’s competitive position and very much complement our contemplated merger with the P&G Specialty Beauty Business. Today’s announcement is another step in our progression towards creating a pure-play global leader and challenger in Beauty."

Hypermarcas was established in 2001 in Brazil as a marketer of pharmaceutical products. It has been catering to several segment including flu symptoms, pain relief, antacids, among others. The company has an established portfolio in Rx drugs such as Predsim, Celestamine, Maxsulid, Diprospan, Mioflex-A. The company also caters to consumer health segments such as nutritionals and dermo-cosmetics.