TOKYO, Feb 8 (Reuters)
Kao Corp, Japan's biggest home products maker, on Friday announced plans to buy U.S. hair-care products firm KMS Research Inc for an undisclosed amount as it seeks to offset a saturated market at home by expanding abroad.
The 100-percent takeover of California-based KMS, a high-end salon exclusive hair care maker with $40 million in annual revenue, is expected to be completed in late February through Kao's wholly-owned German unit Goldwell GmbH, Kao said.
The deal would give Kao a solid business platform in the United States, the world's largest hair salon market. Kao has cultivated its salon hair care business mainly in Europe through Goldwell and currently earns 20 percent of its revenue abroad.
After the takeover, the German unit would have combined annual sales of 40 billion yen ($299.1 million), Kao said, adding that it hopes to expand the unit's sales by 20 percent in three years.
Kao, known overseas for its "Biore" cosmetics line, markets its Elumen hair-care product in Europe through Goldwell. It had been looking at marketing the brand in North America from April.
Kao Senior Managing Director Toshio Hoshino told reporters that Kao was looking into more mergers and acquisitions overseas.
"We are looking for companies for better synergies in the hair care business in South America and the rest of Asia,'' Hoshino said. Hong Kong, Taiwan, Singapore are areas where Kao already has operations and would be excluded, he said.
Kao also hopes to bring the the German subsidiary public in the future, he added.
Before the announcement, Kao ended Friday up 2.35 percent at 2,395 yen, outpacing the Nikkei average's 1.07 percent rise.
Last Thursday, Merrill Lynch upgraded Kao to a 'strong buy' from 'buy', a day after it hit a near three-year intra-day low at 2,305 yen.
Click Here For More News
