Avon Products (AVP) to Sell Silpada Business in $100M Deal
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On June 30, 2013, Avon Products, Inc. (NYSE: AVP) entered into an Asset Purchase Agreement to sell its Silpada jewelry business (“Silpada”) to Rhinestone Holdings, Inc. ("Rhinestone") for $85 million, plus an earn-out up to $15 million if Silpada achieves specific earnings targets over two years. Rhinestone is a newly formed entity owned by the founders of Silpada. Earlier this year, the Company disclosed that it was reviewing strategic alternatives for Silpada. As of June 30, 2013, the Company will account for and report Silpada as discontinued operations. The Company expects to record a charge of approximately $80 million pre-tax (approximately $50 million net of tax), reflecting the estimated loss on sale, in the second quarter of 2013. The transaction is expected to close on July 3, 2013. The Company expects that the proceeds from the sale will be used for general corporate purposes, including the repayment of outstanding debt.
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