After rebuffing takeover bid, Avon names McCoy CEO.
McCoy, 53, who was a vice chairman of four divisions at Johnson & Johnson (J&J), joins Avon effective April 23.
At J&J she was vice chairman of the pharmaceutical, consumer and information technology divisions, and the corporate office of science and technology. In this capacity she served on J&J's executive committee with oversight for more than 60% of the company's $65 billion in revenues. Her responsibilities included stewardship of a broad portfolio of consumer brands, including Neutrogena, Aveeno, Lubriderm, Clean & Clear and ROC.
Her appointment comes on the heels of Avon's rejection of an unsolicited $10 billion acquisition bid from Coty Inc. Avon said the bid was "opportunistic" and too low, adding that it remained confident in its standalone prospects.
Coty chairman Bart Becht said, "We believe Avon's shareholders would want their board to explore with us the benefits to shareholders of a transaction."
Becht added that the combination of the two suppliers would create "an iconic beauty company" and provide consumers greater access to innovative products across multiple distribution channels.
Avon's board said the bid, which offered shareholders a 20% premium over the company's closing share price on March 30, did not reflect the fundamental value of Avon and its global beauty care franchise. The offer represented a multiple of 1.1 times Avon's net revenue for the fiscal year ended December 31, 2011, and 8.7 times 2011 EBITDA. "This is significantly below multiples that the board of directors believes an iconic consumer company is worth in a change-of-control transaction," the board said in a statement.
Avon added that it was committed to its publicly announced process of hiring a new CEO and executing against its long-term potential. "With a new CEO, Avon's board firmly believes that there is greater opportunity to improve shareholder value in excess of Coty's conditional indication of interest," said the statement.
A week later Avon announced the appointment of McCoy. "The board conducted an extensive search among many world-class candidates across the direct selling, retail and consumer sectors, and Sheri emerged as the clear choice to take Avon into the future," said lead director Fred Hassan. "Sheri has a unique combination of strategic and finely honed operational skills, a significant turnaround track record, global experience and people leadership.
"Given her consistent record of outperforming against new challenges, we have great confidence that under Sheri's leadership Avon can successfully execute against our strong long-term prospects."
Andrea Jung, currently Avon's chairman and CEO, will serve as executive chairman once McCoy assumes the CEO position. "We are thrilled to have someone of Sheri's caliber assuming the leadership of Avon," Jung said. "Throughout her career at J&J, Sheri has had a demonstrated track record of achieving results and driving change across highly diverse operating units with widely varying product lines, customers, distribution channels and business models. She is also known for her ability to identify and empower great talent and motivate and inspire people. I look forward to supporting Sheri as Avon's new CEO."
McCoy said, "I am extremely honored and excited to join Avon--a great company with an iconic brand and so much clear potential. Avon has an unparalleled global direct selling sales force of over 6 million representatives and an enviable geographic footprint. I look forward to working with the team to develop and execute a road map to achieve the next phase of growth for the company."
Before being named vice chairman 15 months ago, McCoy was J&J's worldwide chairman for pharmaceuticals, a position she assumed in January 2009. Her appointment followed a diverse career in the company's consumer and medical devices businesses.
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|Title Annotation:||Supplier News|
|Publication:||Chain Drug Review|
|Date:||Apr 23, 2012|
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