NEW YORK, July 2, 2013 -- Avon Products, Inc. (NYSE: AVP) announced today that it has entered into a definitive
agreement under which Rhinestone Holdings, Inc. ("Rhinestone") will acquire Avon’s Silpada Designs jewelry
business (“Silpada”) for $85 million in an all-cash transaction, plus an earn-out of up to $15 million if Silpada achieves
specific earnings targets over two years. The transaction is expected to close July 3, 2013.
“Stabilizing Avon’s U.S. business is a top priority in our turnaround efforts,” said Avon Chief Executive Officer Sheri
McCoy. “Divesting Silpada is an important step in our plan and will enable us to focus our resources on the core Avon
In February, the Company disclosed that it was reviewing strategic alternatives for the Silpada business. Avon
determined as part of this process to divest Silpada because of the timeline and investment required to return the
business to historical levels of profitability. Based upon this decision, Avon ran a broad auction process that included
financial sponsors and strategic buyers. At the end of the process, Rhinestone, a newly formed entity owned by the
founders of Silpada, provided an offer that emerged as the highest bid. Avon received an independent fairness
opinion for the price received.
Avon expects to record a non-cash charge of approximately $80 million pre-tax (approximately $50 million net of tax),
reflecting the estimated loss on sale, in the second quarter of 2013. Avon expects that the proceeds from the sale will
be used for general corporate purposes, including the re-payment of outstanding debt, further strengthening Avon’s
Avon, the company for women, is a leading global beauty company, with nearly $11 billion in annual revenue. As one
of the world's largest direct sellers, Avon is sold through more than 6 million active independent Avon Sales
Representatives. Avon products are available in over 100 countries, and the product line includes color cosmetics,
skincare, fragrance, fashion and home products, featuring such well-recognized brand names as Avon Color, ANEW,
Skin-So-Soft, Advance Techniques, and mark. Learn more about Avon and its products at www.avoncompany.