The Wall Street Journal is reporting that the Coty acquisition of OPI could be announced as early as tomorrow, although the article cautions that "negotiations could still fall apart", according to their source. It's an interesting article to read, particularly the part about how nail polish has surged (up over 11% last year) well above other beauty products during the recession. It's nice to hear that others are enjoying nail polish as much as we always have! Check out the paragraph I highlighted in red--I wouldn't have guessed that OPI had that small of the market share, nor that Coty/Sally Hansen/NYC Color Line had such a large share of the market.
Coty Inc., one of the world's largest fragrance companies, is close to an agreement to acquire nail-polish maker OPI Products Inc. for about $1 billion, people familiar with the matter said.
Talks were continuing Sunday, and a deal could be announced as early as Monday, these people said. But the negotiations could still fall apart, they added.
Closely held Coty has been on the acquisition trail recently, announcing last week that it had agreed to purchase beauty company Philosophy from private-equity firm Carlyle Group. Terms of the purchase weren't disclosed, but people familiar with the matter valued the deal at around $1 billion.
Two weeks ago, Coty, which has annual sales of $3.6 billion, said it was buying Dr. Scheller Cosmetics AG of Germany.
Though the beauty industry suffered sluggish sales during the recession, demand for nail polish has surged in recent years as women embraced it as an inexpensive way to accessorize their apparel. In 2009, U.S. sales of nail polish rose 11% from the previous year to $462.9 million, according to market-research firm Euromonitor International Inc.
OPI was founded in 1981 by George Schaeffer, who is president and chief executive. The company began as a dental-supply business. Based in North Hollywood, Calif., OPI now sells nail polish and other nail-related products in salons, using fanciful names for its colors like "Overexposed in South Beach" and "I'm Not Really a Waitress." Its products also are sold in retail stores.
OPI, which is considered a premium brand, held about 6% of the U.S. nail-polish market last year, according to Euromonitor. Coty, which owns the market-leading Sally Hansen brand and the NYC New York Color line, held 48%.
New York-based Coty makes fragrances for brands including Calvin Klein, Vera Wang and Stetson, and calls itself the world's largest fragrance company.