As part of its strategy to focus on its higher-margin oral care, personal care and pet nutrition businesses, and expanding its portfolio in premium skin care, Colgate-Palmolive Co. (NYSE: CL – $74.38) announced that it has agreed to acquire the Laboratoires Filorga Cosmétiques Skin Care Business for a purchase price of approximately $1.69 billion. Filorga is a premium anti-aging skin care brand focused primarily on facial care. Originally founded in France in 1978, the brand is now sold in over 60 countries with its largest markets being France, Italy, Spain and Greater China. The Filorga brand leverages a multi-channel distribution strategy across pharmacy, online, specialty stores and travel retail. The transaction will be financed with a combination of debt and cash and is currently expected to close in the third quarter of 2019. The acquisition is conditioned upon receipt of regulatory approvals in certain countries and is expected to have no impact on diluted earnings per share in 2019.
Shares of Colgate, yielding 2.3%, are amply valued at current quotations at 26 times 2019 earnings’ estimates. However, long-term holdings remain intact. especially when viewed on a risk-adjusted basis.