Cerebus Capital Management will purchase an 80 percent stake in makeup manufacturer Avon North America, the firm announced Thursday. The deal would split Avon's North American business from its 129-year-old parent company and render it privately held. 

Cerberus, a New York private equity firm, would also purchase a 17 percent stake in parent company Avon Products Inc. for $435 million, for a total investment of $605 million. As part of the deal, Cerberus will take three seats on Avon's board of directors. 

Avon, famed for selling beauty products door-to-door, has had its own callers this year, with activist investors including Barington Capital Group demanding a corporate shakeup. Revenues at Avon have fallen precipitously in the past five years as customers increasingly moved online, eschewing the home visits of company representatives known as Avon Ladies. 

In a statement, Avon Chief Executive Sheri McCoy called the deal "a strategic partnership that will improve Avon's performance and drive shareholder value," adding that the separation of Avon North America from its parent company was "the best way to ensure that both businesses have an unencumbered path to profitability and growth." 

McCoy was brought in as CEO in April 2012 in an effort to reorient the foundering company, but her tenure has seen Avon shares decline by more than 80 percent. 

Cerberus and Avon executives said in a joint announcement that the takeover would bolster Avon's balance sheet and allow the North American division to restructure and slim down its operations. The parent company, Avon Products, will suspend its dividends as part of the deal. 

Avon stock was up 19.5 percent to $4.88 in pre-market trading.