BY Richard Summerfield
American multinational Johnson & Johnson has announced that it is to acquire haircare company Vogue International in a $3.3bn all cash deal.
The deal, which is subject to customary closing conditions, is expected to close in the third quarter of 2016 and is Johnson & Johnson’s biggest deal for four years. In 2012 the company paid $18bn for Synthes Inc - a deal which represented the company’s largest ever transaction.
Private equity firm Carlyle Group, which owns a 49 percent stake in Vogue (a holding which it acquired for $400m in 2014) is set to quadruple its initial stake through the deal. Vogue’s founder, Todd Christopher, who owns the remaining 51 percent stake in the company, will become a billionaire as a result of the sale.
Sandra Horbach, Carlyle managing director and head of the company’s consumer & retail team, said in a statement: “It has been a privilege to partner with Todd and to support his efforts to develop and launch innovative products, strengthen and grow the organisation, advance sustainability practices, and reach new customers all around the world with the OGX brand. Johnson & Johnson Consumer Inc. will be a great new home for Vogue.”
The deal, once completed, will add a number leading haircare brands, such as OGX shampoos and FX hair styling products, to Johnson & Johnson’s consumer portfolio that already includes globally recognisable brands, including Neutrogena and Clean & Clear. Though the company is perhaps best known for its sales of drugs and medical devices, Johnson & Johnson’s consumer brands are also a key part of its offering. Indeed, Johnson & Johnson has been revamping its consumer division of late. Consumer products accounted for around 19 percent of the company’s sales last year.
Given that Vogue’s estimated annual sales are in the $300m range, the acquisition could be a notable one for Johnson & Johnson. “Our acquisition of Vogue International's full line of leading advanced hair care products sold in the US and in 38 countries will strengthen our global presence in this important category. Vogue International's commitment to quality, innovation, and consumer preference complement our Consumer portfolio, while also presenting attractive hair care category growth opportunities for Johnson & Johnson," said Jorge Mesquita, worldwide chairman of consumer goods at Johnson & Johnson.