Alberto-Culver, which is a beauty company specializing in hair and skincare, said it intends to invest 'aggressively' in the brand in an effort to grow a brand that is already well established and known in the US.
Nexxus produces a range of conditioners, shampoos as well as styling and finishing products that help contribute to the company's $40 million sales in 2004.
Products include Aloe Rid clarifying shampoo, Botanic Oil conditioner and Retexxtur anti-frizz treatment.
Through its Cosmetics Laboratories of America unit, Alberto-Culver has been working in conjunction with Nexxus to formulate and manufacture products for the past 20 years.
Alberto-Culver president and CEO Howard Bernick said, " Nexxus has excellent products and strong brand equity today and we believe with the greater human, strategic and financial resources of Alberto-Culver and with stepped-up marketing investment, that it should be able to grow substantially in the future under our ownership."
Jim Marino, President, Alberto-Culver Consumer Products Worldwide said, "The consumer awareness level of Nexxus is comparable to many other leading hair care brands,"
Marino also added that he now anticipated that the Nexxus brand, which was owned and run by the California-based Redding family, would be added to the company's worldwide portfolio, a possible hint that the reach of the brand could be extended into the current extensive market coverage in both Canada and the US.
Bernick also said that he expected the acquisition would not material impact Alberto-Culver's sales or earnings in the short-term. Furthermore, the exact terms of the purchase, which is expected to close by 24 May, were not disclosed.
The acquistion is not the first the company has made this year. In January, Alberto-Culver acquired CosmoProf, a professional beauty products distributor, also based in California.
This move extended the company's geographic reach into important urban areas such as California, Oregon, Idaho, Washington, Utah, Nevada and Arizona.
CosmoProf's annual sales were near the $100 million (€75m) level in 2004, but after closing, Beauty Systems sales should be over $900 million, a figure that is expected to be slightly accretive to Alberto- Culver Company earnings in fiscal 2005.
At the end of April Alberto-Culver reported that its second-quarter profit rose 21 on higher sales, a performance that was particularly boosted by its Tresemme hair care brand and the introduction of new Alberto VO5 and St. Ives products.
Quarterly income grew to $49.1 million from $40.6 million in the same period a year ago. Sales rose 8 per cent to $884.1 million from $819.3 million last year, approximately $2.5 million up on analysts' expectations.
However, the company did say that its beauty systems group was struggling against lower sales in certain retail outlets in the US. This meant that sales growth was slightly less than in previous quarters.
Its beauty systems group has had a challenging year due to lower sales that resulted from certain product line distribution changes in the United States. Alberto-Culver said both that group and its Sally USA operations were hurt by winter weather and one less selling day in the quarter.