Perfumania acquires Parlux Fragrance

New York-based wholesale distributor and specialty retailer of fragrances Perfumania has completed the acquisition of Parlux Fragrances.

Following the transaction, the outstanding shares of Parlux common stock were converted into the right to get cash and Perfumania’s common stock which amounts to a total value of about $118m.

With this move, Parlux Fragrances has become a completely-owned subsidiary of Perfumania.

Perfumania said that it will issue nearly 6.014 million shares of its common stock and pay Parlux shareholders about $62.1m in cash.

Depending on the elections, for each share of Parlux stock held at the effective time of the acquisition, Parlux shareholders will be given either 0.533333 shares of Perfumania common stock or 0.20 shares of Perfumania common stock plus $4 in cash.

Newly issued shares represent nearly 40% of Perfumania’s issued and outstanding common stock after the merger, the company said.

Parlux directors Frederick E. Purches, Anthony D’Agostino, Esther Egozi Choukroun, Glenn Gopman and Robert Mitzman on the merger were elected to Perfumania’s board of directors.

Perfumania said that it financed the cash portion of the acquisition, while the transaction-related expenses were done by borrowing approximately $35.5m under its senior secured credit facility and on a subordinated basis and $30m from family trusts of the Nussdorf family, principal Perfumania shareholders.

Perfumania management and Perfumania’s board of directors’ special committee were financially advised by Wells Fargo Securities and Financo Securities respectively; while Edwards Wildman Palmer and Carlton Fields were legal counselors to Perfumania and its special committee, respectively.

Perfumania chief executive officer and president Mike Katz said the combination of Perfumania and Parlux is a major step toward building a more significant and financially stronger designer fragrance and beauty products company.

"Parlux brings a wealth of products and expertise as a licensee, manufacturer and international distributor," added Katz.