It is reported that Physicians Formula turned down an earlier offer from a San Francisco private equity firm to opt for local player Markwin’s $74.9 million bid; reported to be the highest offer on the table.
Under its Physicians Formula brand name, the company markets premium-priced cosmetics products for the mass-market channel, whilst Markwins’ color cosmetics, accessories and beauty collections are sold at a variety of price points in department and specialty stores.
Strengthens portfolio
Whilst the former’s products are mainly sold in US chain retailers, Markwins’ range is sold in 60 countries worldwide, offering greater scope.
“Markwins and Physicians Formula sell non-competing brands in similar channels,” said Physicians Formula chief executive Ingrid Jackel. “Combining the resources and experience of both companies will strengthen the combined portfolio of brands.”
"The acquisition of Physicians Formula fulfills a strategic Markwins’ objective to expand and diversify our already robust brand portfolio,” added Markwins chief executive Eric.
Details
The deal will see Markwins pay $4.90 per Physicians Formula share, a 33 percent premium over the company's close on Aug. 14, when it announced that Swander Pace Capital would be buying it; with Physicians Formula now paying a termination fee of $1.28 million over this agreement.
Physicians Formula’s employees will continue to be located at the company's existing facilities in Azusa, California.
Stockholders of Physicians Formula who collectively own about 22 percent of its outstanding shares have agreed to vote in favor of the deal, subject to certain exceptions.
It is believed that earlier this month, Physicians Formula received a new acquisition offer from an unnamed private equity firm for $73.1 million.