BUSINESS COMBINATIONS

12 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Business Combinations

BUSINESS COMBINATIONS

The Company completed two acquisitions during fiscal 2014:

Acquired entity	Date acquired	Purchase Price		Segment
Lena White, Ltd. (“Lena White”)	January 2, 2014	$	11.0	Color Cosmetics
StarAsia Group Pte Ltd. (“StarAsia”)	July 1, 2013	23.5		All segments

Lena White

On January 2, 2014, the Company executed a Share Purchase Agreement (“Lena White SPA”) to acquire 100% of the shares of Lena White, a U.K. distribution business for approximately £6.6 million ($11.0), subject to post-closing net working capital adjustments. The acquisition allowed the Company to integrate sales and distribution of certain Color Cosmetic products in the U.K. Included in the consideration paid is £0.5 million ($0.8) that the Company deposited into escrow under the Lena White SPA, which will be released to the seller subject to subsequent adjustments for indemnities against the seller’s warranties. Also included in the cost of the acquisition is £0.7 million ($1.1) of estimated contingent consideration calculated using a pre-determined formula in the SPA, payable upon completion of a three-year period following the execution of the Lena White SPA and is subject to adjustments based on final calculations. Future adjustments to the estimated contingent consideration will be included in Selling, general, and administrative expenses in the Consolidated Statements of Operations. Contingent consideration will range between nil and £1.5 million ($2.5).

As of the date of this Annual Report on Form 10-K and in accordance with the terms set forth in the Lena White SPA, the purchase price and purchase price allocation as it relates to post-closing net working capital adjustments have not been finalized. The purchase price is expected to be finalized during fiscal 2015. The following table summarizes the preliminary consideration and the allocation of the purchase price to the net assets acquired in the Lena White acquisition:

Consideration:

Cash paid	$	8.3
Cash received from seller for initial net working capital adjustment	(0.3		)
Noncash consideration for pre-acquisition trade receivables	1.9
Contingent consideration payable	1.1
Purchase price	$	11.0

	Estimated fair value		Estimated useful life (in years)
Goodwill	$	1.9
Customer relationships	4.0		7
Other net assets	5.1
Total identifiable net assets	$	11.0

The goodwill is not deductible for tax purposes and represents expected benefits associated with the Company’s control over future expansion in the U.K. and the Color Cosmetics segment. Goodwill of $1.9 was allocated to the Color Cosmetics segment.

For the year ended June 30, 2014, Net revenues and Net loss of Lena White included in the Company’s Consolidated Statements of Operations from the date of acquisition were $7.8 and $(1.7), respectively.

Transaction-related costs associated with this acquisition of $0.1 during the year ended June 30, 2014 were expensed as incurred and included in Selling, general, and administrative expenses in the Consolidated Statements of Operations.

StarAsia

On July 1, 2013, the Company executed a Share Purchase Agreement to acquire 100% of the shares of StarAsia for net consideration of $23.5, after final post-closing adjustments. StarAsia is a regional distribution company that acted as a third party distributor of the Company’s fragrance, color cosmetics and skin & body care products in South East Asia, as well as beauty products supplied by parties other than the Company.

The following tables summarize the consideration and purchase price allocation to the net assets acquired in the StarAsia acquisition:

Consideration:
Cash paid	$	25.0
Noncash consideration for pre-acquisition trade receivables	2.0
Net working capital adjustment received from seller	(3.5		)
Purchase price	$	23.5

	Estimated fair value		Estimated useful life (in years)
Goodwill	$	11.5
Customer relationships	7.4		12
Other net assets	4.6
Total identifiable net assets	$	23.5

The goodwill is not deductible for tax purposes and represents expected benefits associated with the Company’s control over future expansion in Asia and all of the Company's segments. Goodwill of $7.0, $3.8, and $0.7 is allocated to the Skin & Body Care, Fragrances and Color Cosmetics segments, respectively.

For the year ended June 30, 2014, Net revenues and Net loss included in the Company’s Consolidated Statements of Operations from the date of acquisition were $24.6 and $(4.4), respectively.

Transaction-related costs associated with this acquisition of $0.4 and $1.1 during fiscal 2014 and 2013 were expensed as incurred and included in Selling, general, and administrative expenses in the Consolidated Statements of Operations.

Acquisition of Licensing Rights

On October 29, 2012, the Company acquired licensing rights from a third party to distribute a celebrity’s existing fragrance portfolio and develop new fragrances. The transaction was accounted for as a business combination with a total consideration of $11.7, including a contingent consideration of $3.5. The total consideration was allocated to license agreement of $6.1, which is amortized over its estimated useful life of 12 years, goodwill of $7.4 (net of deferred tax adjustment of $1.2), and net other liabilities of $3.0. This goodwill is deductible for tax purposes and represents expected synergies associated with integrating the acquired business into the Company’s operations and is included in the Fragrances segment. The Company settled the contingent consideration with the third party for $1.1 in July 2013.