Avon cosmetics company is cheaper than you can buy

Procurement companies cannot find a company of personal goods cheaper than Avon Products Inc. If there is a reason for the company to be cheap is another matter.
Shares of cosmetics counter operating a multiple in relation to its revenue less than other companies of similar size, although the Avon grew 15 percent yesterday, when the Deai reporter said the New York-based company had organized negotiations with private equity firm TPG Capital.
An acquisition makes sense because Avon has many opportunities to increase your cash flow and finds himself in the middle of a recovery, said Joshua Strauss, one of the managers of the Appleseed Fund in Chicago to the Pekin Singer Strauss Asset Management Inc.
"Be a publicly traded company carries major costs and it's a great distraction when they need to focus a lot on the task in progress," said Strauss, whose Fund oversees about $ 300 million, including shares of Avon, in a telephone interview. "They have a lot to fix, which will take several quarters, and there is impatience in the streets".
The TPG and the Avon already closed deals in the past. The supplier of makeup with door-to-door sales sold its stake in Avon Japan to an affiliate of TPG in 2010. Linda Bolton Weiser of the b. Riley co. estimates a potential listing for sale of up to $ 14 per share.
Is a prize of more than 60 percent over the closing price of Avon yesterday, $ 8,66, but still below the offer of $ 23.25 per share made by Coty Inc., rejected by Avon in 2012.
Later, the Coty withdrew a sweetened offer of $ 24,75 per share, citing the "reluctance to engage in discussions" of Avon.
Problems of Avon
Avon, whose market value is $ 3.8 billion, operates at 0.4 times its revenue for the last 12 months, close to its lowest in at least a decade.
The shares have plummeted because the company reported two years of losses and accumulated as much as $ 500 million in spending to finish with accusations of bribery. It is projected that Avon tell their lower annual revenue since 2006 when announce its earnings next month.
Strategic buyers are less likely to be interested by the company into trouble, said Strauss. Corporate reforms as the Avon needs are more the fortress of private equity firms.
"The underlying power of earning profits is very important," he said. If they can make the Avon recovers, a private equity buyer "will make a lot of money".