Cosmetics maker Natura & Co Holding SA raised 5.61 billion reais ($1 billion) in an equity sale that will help it make the most out of its purchase of Avon Products Inc.
The Sao Paulo-based firm sold 121.4 million voting shares at 46.25 reais apiece, according to a filing, confirming an earlier report by Bloomberg. Stock rose as much as 1.7% in early trading Friday before paring gains.
- Natura, which is also the owner of the brands Natura, Body Shop and Aesop, will use proceeds for cutting debt and investments tied to its digital channels, geographic expansion and Avon’s integration
- The firm’s ability to turn around Avon’s operations is still seen as one of the top risks by analysts and investors
- The deal was priced at a 1.6% discount to Thursday’s close
- Morgan Stanley was the lead underwriter, while Bank of America, Bradesco BBI, Citi and Itau BBA also ran the deal
- This is the second time Natura raised money with investors this year: in the second quarter, the firm announced a 2 billion-real private capital increase aimed at strengthening its cash reserves amid the pandemic
- The company ended the second quarter with net debt of 10.6 billion reais and a cash position of 7.4 billion reais
— With assistance by Cristiane Lucchesi
(Updates with stock move in second paragraph.)