Johnson Products Co., a pioneering black-owned manufacturer of hair care products, said Monday it agreed to sell the business to Ivax Corp. of Florida for an estimated $67-million.
The planned sale means the company will pass from black ownership for the first time since its founding in 1954.
Johnson stockholders will receive one Ivax share for each Johnson share they own. The conversion ratio will be adjusted if the Ivax stock is selling for more than $29 or less than $24.50 when the deal closes.
The companies said the deal could be worth $61-million to $73-million, depending on the ultimate conversion. Johnson chairman and chief executive officer Joan B. Johnson said the estimated sale price of $67-million compared with the company's value of $11-million just four years ago.
Joan Johnson founded Johnson Products with her then-husband, George, in 1954. In 1989, George Johnson turned the company over to his wife as part of a divorce settlement.
Johnson Products has about 10 percent of the black hair care market and is about half the size of its main competitor, Soft Sheen Products Co., said Thomas P. Polke, Johnson's vice president and chief financial officer. Net earnings for the first six months that ended Feb. 28 were $2.43-million.
The company was ranked 23rd on Black Enterprise magazine's listing of the top 100 black-owned companies in 1992.
Johnson's line of personal-care products includes such brands as Ultra Sheen, Gentle Treatment and Curly Perm.
The Johnsons' son, Eric, was widely credited with revitalizing the company when he was CEO.
Johnson Products had developed a reputation of lagging behind market trends, including the development of a no-lye formulation of hair straightener.
However, Eric Johnson left the company abruptly in March 1992. That left Mrs. Johnson as the majority stockholder, chairwoman and chief executive officer.
Ivax, headquartered in Miami, produces specialty chemicals, pharmaceuticals and medical diagnostics. Its Flori Roberts Inc. subsidiary focuses part of its skin-care and cosmetics business on black customers.