Avon (AVP) stock was up on Thursday following news of a $605 million deal with Cerberus Capital Management.
Avon has announced that Cerberus will invest $435 million into it. This will be done through convertible perpetual preferred stock that has a conversion price of $5 per share. This is a 46% for AVP stock’s volume-weighted average price over the last 30 days and represents a 17% stake in the company if converted to common stock.
Cerberus will also be acquiring Avon’s North America business for a $170 million investment in the company. This will give it roughly 80% ownership of the business. The North America business will also have $230 in liabilities from the company, but it will be offset by $100 million in cash from AVP.
The deal between Avon and Cerberus is expected to close during the Spring of 2016. AVP CEO Sheri McCoy said the deal will enhance the company’s performance while increasing shareholder value.
AVP shares were up 4% as of Thursday morning.
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