Avon to buy sterling silver jewellery firm Silpada Designs for at least $650 million

US cosmetics and perfume giant Avon Products Inc yesterday said that it would acquire Silpada Designs Inc., the world's largest direct seller of sterling silver jewellery for at least $650 million.

Founded in 1997, privately held Silpada has annual revenues of approximately $230 million and generates operating margins that are significantly higher than Avon's.

Kansas-based Silpada's sterling silver jewellery is sold exclusively by 32,000 independent representatives throughout the US, Canada and the UK. The company offers a range of approximately 450 sterling silver jewellery products at prices that are higher than Avon's core jewellery offerings.

Under the deal, Avon will make an initial payment of about $650 million for Silpada's assets and would make an additional payment in early 2015 to current Silpada shareholders if certain earnings growth targets are achieved.

As part of the transaction, Avon will get Silpada's 375,000 square feet of office, warehouse and distribution centre, spread across  two buildings in Lexena.

New York-based Avon run by CEO Andrea Jung, markets its products in over 140 countries and has an annual sales turnover of over $10 billion.

It said that the planned acquisition is consistent with its previously stated strategy to explore acquisition opportunities that complement its core beauty and direct selling business.