Unilever to acquire Alberto-Culver
Unilever to acquire Alberto-Culver
Unilever PLC, the Anglo-Dutch consumer-products giant, is closing in on a deal to purchase Alberto Culver Co., maker of Alberto VO5 hair-care products, people familiar with the matter said.
Unilever is expected to pay $37.50 in cash for Alberto Culver, a 19% premium to its Friday closing price of $31.48, a person familiar with the matter said, but added that talks were still ongoing.
The total value of the deal would be $3.7 billion at that per-share price, based on 98.6 million shares outstanding. Barring a last-minute snag, a deal could be announced as early as Monday.
A spokesman for Unilever had no comment while officials of Alberto Culver, based in Melrose Park, Ill., couldn't be reached.
Alberto Culver's portfolio includes a number of well-known hair-care brands, such as TRESemme and Nexxus, in addition to Alberto VO5, and skin-care products such as St. Ives and Noxzema. The company, part owned by the family of founder Leonard Lavin, and which dates its roots back more than 50 years, had sales of $1.4 billion for the fiscal year ended in September 2009.
The deal would come almost exactly a year after Unilever announced its purchase of Sara Lee Corp.'s personal-care business for €1.275 billion ($1.72 billion) in cash. That deal, which hasn't closed yet due to regulatory hurdles in Europe, would round out Unilever's personal-care portfolio by adding the cheaper Radox and Sanex brands to higher-end brands like Dove and Vaseline. Unilever has said it expects the Sara Lee deal to be completed by the fourth quarter of 2010.
Personal care, which includes shampoo and skin products, has been outperforming Unilever's other divisions in recent quarters, thanks in part to the success of Degree deodorant and Suave shampoo in the U.S. The consumer-goods giant also launched a successful range of Dove products for men across the globe earlier this year.
Sales in Unilever's personal-care division were €6.7 billion in the first half of 2010, up 7.9% when stripping out the effects of currency fluctuations, disposals and acquisitions. Total sales, when including all divisions, were €21.895 billion for the first half, up 3.8% from a year earlier.
When Unilever agreed to buy the Sara Lee brands last year, Chief Executive Paul Polman called personal care a "strategic category" and a "key growth driver" for the company. The business is also where much of Mr. Polman's experience lies, with him having spent years in the home and personal-care business of Procter & Gamble Co.
In an interview on Bloomberg television earlier this year, Mr. Polman said Unilever was looking to spend €1 billion to €2 billion a year in acquisitions, and that his acquisition strategy was to "fill in white spaces" in Unilever's core categories, while focusing in particular on countries with growing populations of more than 100 million. Following on the Sara Lee purchase last year, Alberto Culver fits the bill.
The remaining bulk of Unilever's business is in food, and it includes products such as Ben & Jerry's ice cream, Hellmann's mayonnaise and Lipton tea.
By bringing Nexxus, VO5 and TRESemme shampoos into its stable of hair-care brands, the acquisition of Alberto Culver would put the Anglo-Dutch Unilever in more direct competition with its American archrival Procter & Gamble. Cincinnati, Ohio-based P&G—Mr. Polman's longtime employer—makes Pantene, Herbal Essences, Head & Shoulders and Clairol hair products.
It would also raise Unilever's presence in North America, where the company abandoned its laundry business in 2008, selling it for $1.45 billion in cash and shares to private-equity firm Vestar Capital Partners.
Mr. Lavin, a horse-racing enthusiast who turns 91 next month, founded the company in 1955 and took it public six years later. Today he sits on the board after relinquishing management of the company in 1994. Alberto Culver's executive chairman now is Carol Lavin Bernick, his daughter. Together, they own more than 14% of the company, according to the most recent proxy filing late last year.
In 4 p.m. composite trading Friday on the New York Stock Exchange, Alberto Culver shares were up 18 cents at $31.48. Unilever's American depositary shares were up 52 cents, or 1.8%, at $29.37.
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