Johnson & Johnson (NYSE: JNJ) agreed to buy closely held hair-care company Vogue International for about $3.3 billion in cash, making its biggest acquisition in four years to expand its consumer division.
The acquisition will add OGX shampoos, conditioners and styling products, as well as the FX line of styling products and the Proganix and Maui Moisture brands, J&J said in a statement Thursday. Vogue, based in Clearwater, Florida, is partly owned by its founder, Todd Christopher, and private equity firm the Carlyle Group LP (Nasdaq: CG), which invested in the company two years go.
One recent personal-care deal in the middle market was announced in May, when Clayton, Dubilier & Rice agreed to buy High Ridge Brands Co., a roll-up of personal care brands, including Zest, Rave and VO5, for $415 million from Brynwood Partners. Procter & Gamble Co. (NYSE: PG) is another consumer company that has been reshuffling its portfolio through M&A. The company is the in the process of selling 40-plus beauty brands to Coty Inc. (NYSE: COTY).
With the purchase, pharmaceuticals giant J&J will bolster its smallest category. The consumer division -- which includes a variety of brands including Johnson & Johnson baby products, Band-Aid bandages, Listerine oral care and Neutrogena hand cream -- made up about 19 percent of sales last year, according to data compiled by Bloomberg. Pharmaceuticals took over as J&J’s largest division in 2014, now accounting for about 45 percent of revenue, while the rest came from medical devices and diagnostics.
The deal is Johnson & Johnson’s biggest since the $18 billion purchase of Synthes Inc., a maker of tools and implants to treat damaged bones, in 2012. That deal was the drugmaker’s largest deal ever, according to data compiled by Bloomberg.
Founded in 1987 by Christopher, Vogue International sells its products in the U.S. and 38 other countries, Carlyle said in a press release on its website. The private-equity firm invested in the business in 2014.
The Vogue transaction is expected to close during the third quarter of 2016. The deal isn’t expected to affect 2016 sales or earnings guidance, New Brunswick, New Jersey-based J&J said.
-- Additional Reporting by Mergers & Acquisitions' Demitri Diakantonis