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14100 N.W. 60th Avenue
Miami, Florida 33014
FOR IMMEDIATE RELEASE
FFI FRAGRANCES TO ACQUIRE ELIZABETH ARDEN AND
ELIZABETH TAYLOR COSMETICS AND FRAGRANCES BUSINESSES
FROM UNILEVER
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MIAMI, FLORIDA (October 31, 2000) -- FFI Fragrances (NASDAQ NM:
FRAG), a leading manufacturer and marketer of prestige fragrances and
related cosmetics and skincare products, announced today that it has
entered into a definitive agreement to acquire the Elizabeth Arden and
Elizabeth Taylor cosmetics and fragrances businesses from the Unilever
Group (NYSE: UN).
The leading brands to be acquired by FFI include the fragrance
brands Red Door, 5th Avenue, Green Tea, Splendor, Sunflowers and White
Shoulders; the skincare brands Ceramides, Millenium and Visible
Difference; and the Elizabeth Arden cosmetics line. In addition, FFI
will acquire the license to Elizabeth Taylor's White Diamonds, one of
the top-selling fragrance brands in the United States, and the Passion
fragrance brand.
The transaction is consistent with FFI's strategy of expanding
its portfolio of owned prestige fragrances, cosmetics and skincare
brands and is a natural evolution of FFI's role as the primary U.S.
distributor of the Elizabeth Arden and Elizabeth Taylor brands. To
ensure the seamless transition of ownership, FFI and Unilever will
enter into agreements related to product distribution, manufacturing
and information technology.
The purchase price will consist of approximately $190 million in
cash and $50 million aggregate face amount of a new series of FFI
convertible preferred stock.
The combined company had pro forma sales of over $800 million for
the last twelve months and will rank as one of the largest prestige
beauty companies in the U.S., employing approximately 2,300 employees
in 12 countries and selling its products in over 90 countries
worldwide.
The transaction is expected to close by the end of the year.
Following the completion of the transaction, the Company expects to
change its name to Elizabeth Arden and its stock symbol on the Nasdaq
National Market to "RDEN".
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E. Scott Beattie, Chairman, President and Chief Executive Officer of
FFI Fragrances commented, "This transaction is an important milestone
for FFI that will strengthen our portfolio of brands and solidify our
position as one of the leading prestige beauty companies in the world.
Elizabeth Arden is one of the most prestigious and recognized names in
the cosmetics and fragrances businesses, with a loyal customer base.
Just as important, Arden's brands are an excellent complement to our
existing brand portfolio. We see a substantial opportunity to grow
these brands by launching new products and leveraging our sales and
marketing expertise, as well as our strong retailer relationships. In
addition, Arden significantly enhances our presence internationally,
where we see opportunities to broaden the distribution of our existing
portfolio of owned brands such as Halston, Geoffrey Beene and Paul
Sebastian."
Mr. Beattie continued, "There are also a number of important financial
benefits. The acquisition will nearly double our sales, increase our
penetration of higher-margin businesses and position us to
significantly enhance our profitability. For next year, we expect
that our highest-margin business owned and licensed brands will
represent more than 70% of total sales, compared to approximately 45%
today. As a result, we anticipate that the acquisition will be
accretive to earnings per share during our next fiscal year."
Mark Landry, Senior Vice President, Finance and Information
Technology, Unilever Home & Personal Care, said, "We look forward to
the long-term growth and development of these brands. FFI is an ideal
partner that knows these brands, understands the fragrance and
cosmetics markets and has strong relationships with retailers."
FFI's current management team includes three executives who have
senior management experience at Elizabeth Arden. Management of the
combined company will have an average of over 20 years of business
experience, with much of that in the beauty industry.
Donaldson, Lufkin & Jenrette Securities Corporation acted as financial
advisor to FFI and FFI has received financing commitments from
affiliates of Donaldson, Lufkin & Jenrette and Fleet National Bank and
its affiliates.
The transaction has been approved by the Boards of Directors of both
companies and is subject to customary closing conditions, including
Hart-Scott-Rodino clearance. Neither party's shareholders are
required to approve the transaction. FFI Fragrances intends,
however, to convene a special shareholders meeting to, among other
things, approve certain equity issuances upon conversion of the
convertible preferred stock to be issued as part of the purchase
price. The Board of Directors of FFI Fragrances has fixed the close
of business on November 1, 2000 as the record date for shareholders
entitled to vote at the special meeting, which is expected to be held
in December 2000. Holders of a majority of the outstanding common
stock of FFI Fragrances have agreed to vote in favor of such equity
issuances.
FFI Fragrances is a rapidly growing manufacturer and marketer of
prestige fragrances and related skin treatment and cosmetics products
in the approximately $40 billion U.S. cosmetics and toiletries
industry. Through its e-commerce business-to-business platform, FFI
Fragrances sells its products to more than 35,000 retail locations,
including department stores, mass merchants, drug stores and
independent fragrance, cosmetics and specialty stores.
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"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: The statements contained in this release which are not
historical facts are forward-looking statements that are subject to
risks and uncertainties that could cause actual results to differ
materially from those set forth in or implied by forward-looking
statements, including: the failure of the parties to satisfy closing
conditions; delays related to the acquisition; the ability to obtain
the financing necessary to effect the acquisition; the ability to
obtain necessary regulatory clearances for the acquisition; costs
related to the acquisition; the Company's ability to successfully and
cost-effectively integrate the acquired business and other acquired
companies and new brands into the Company; the Company's ability to
retain current Elizabeth Arden employees; the Company's ability to
launch new products and implement its growth strategy; risks of
international operations; the substantial indebtedness of the Company,
including the indebtedness incurred in connection with the
acquisition; supply constraints or difficulties; the impact of
competitive products and pricing; changes in the retail industry; the
effect of business and economic conditions; and other risks and
uncertainties. More detailed information about these factors is
included from time to time in reports filed by the Company with the
Securities and Exchange Commission. Readers are cautioned not to
place undue reliance on forward-looking statements which speak only as
of the date hereof. The Company assumes no responsibility to update
or revise forward-looking statements contained herein to reflect
events or circumstances following the date hereof.
Company Contact: Joel B. Ronkin
(305) 818-8151
Investor Contact: Stacey Bibi/Shannon Froehlich/Natasha Boyden
Morgen-Walke Associates
(212) 850-5600
Press Contact: Michael McMullan/Eileen King
Morgen-Walke Associates
(212) 850-5600
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