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Unilever to Buy TIGI and Advanced Education Academies

January 26, 2009

Acquisition set for $411.5 million in cash by March 2009

Unilever announced today that it has signed an agreement to acquire the global TIGI professional hair product business and its supporting advanced education academies for a cash consideration of $411.5 million.
 
Vindi Banga, Unilever president, foods, home and personal care, said, “This is an exciting acquisition for Unilever. It illustrates our determination to actively manage our portfolio in line with our stated strategic priorities, including a focus on personal care and higher growth areas.
 
“We already have a strong position in daily hair care and adding the salon brands will further build our position in the hair category. We can bring our world-class R&D expertise to it and offer greater opportunity for geographical expansion. TIGI’s strength in styling, and its fashion and beauty expertise will also help us raise the bar on innovation for our existing hair brands.”
 
Upon completion of the transaction, TIGI will operate as a stand-alone Global Business Unit within Unilever, reporting to Michael B. Polk, president, Unilever Americas.
 
Bruno Mascolo of TIGI, said, “We are excited to join the Unilever family. We have always been passionate about people, so to be able to advance the industry through our products and education by using Unilever’s impressive resources, while continuing to involve those who have made us successful – customers and employees – is very gratifying. We look forward to our future together.”
 
TIGI’s major brands include Bed Head, Catwalk and S-Factor. TIGI has operations in the U.S., UK, Italy, Germany and Australia, employs about 550 people and in 2008, had worldwide sales of approximately $250 million, with almost half coming from the United States.
 
Colin Hession, managing director of specialist cosmetics and toiletries consultants, Colin Hession Consulting, comments:
 
“Unilever has certainly needed to get into professional hair care for some time now, for 2 reasons. Firstly, for its juicy margins—competitors P&G and L’Oréal have been earning money in professional to spend against Unilever in Mass. Secondly, for fashion-orientated, trickle-down learning from professional to sharpen up Unilever’s rather pedestrian approach in mass.
 
"The question is, does this represent a genuine attempt to get into professional, or are they really just anxious to increase the proportion of TIGI which is already diverted into mass?," asked Hession. "If the former, then Unilever hasn't said much to calm the inevitable suspicions of the salon trade. If the latter, the company risks losing the proportion of the TIGI’s business done in Professional…..yet from the announcement, it certainly looks like the latter."
 
According to Mr. Hession, TIGI has allegedly been on the block for some years.

"But any sale has been stalled by trade mark issues stemming from the way the overall Toni & Guy business has been split, including the Academies for training hairdressers. It appears this may now have been resolved,” he added.
 
The acquisition is subject to regulatory approval, but the deal is expected to be completed by the end of March 2009.
  
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