UPDATE 2-Avon buying jewelry direct seller Silpada

* Says deal will boost 2011 EPS by 3-5 cents

* Making initial payment of $650 mln

* Expects deal to close in Q3

* Shares up 1 pct in early trading
(Adds CEO comment, advisers and share move)

NEW YORK, July 12 (BestGrowthStock) – Avon Products Inc (AVP.N: )
said it is buying Silpada Designs Inc, a direct seller of
sterling silver jewelry, for at least $650 million, and
forecast the deal would boost its profits next year.

Avon, a direct seller of women’s beauty products, estimated
the acquisition would lift earnings by 3 cents to 5 cents per
share in 2011. It said Silpada is a fast growing business with
margins significantly higher than Avon’s.

Avon said it would make an initial payment of $650 million
to Silpada shareholders, and will make additional payments in
early 2015 if earnings targets are met. In a regulatory filing,
Avon said the additional payments could range from $50 million
to $100 million.

Avon previously said it would be looking into acquisitions
outside its main beauty business. Chief Executive Andrea Jung
said in a statement the Silpada deal was a way to reach new

Avon said Silpada has annual revenue of $230 million.
Silpada will remain a standalone business with its senior
management continuing to run the company.

Centerview Partners LLC acted as financial adviser to Avon
and Sullivan & Cromwell LLP acted as legal adviser. Lazard
Middle Market LLC was financial adviser to Silpada and Lathrop
& Gage LLP was legal adviser.

The deal is expected to close in the third quarter.

Avon shares were up 28 cents to $28.55 in morning trading
on the New York Stock Exchange.
(Reporting by Phil Wahba, editing by Gerald E. McCormick and
John Wallace)

UPDATE 2-Avon buying jewelry direct seller Silpada