Coty – KKR deal is final
“Today Coty Inc. announced the formal completion of the strategic sale of its Professional and Retail Hair business – including the Wella, Clairol, OPI and ghd brands (together, “Wella”) – to KKR for approximately $2.5bn of net proceeds,” writes Coty CEO Sue Y Nabi in a LinkedIn post she made Tuesday.
“This marks an important milestone in Coty’s transformation and the development of a more focused business that’s set up for long-term success,” she says, adding, “I would like to thank everyone who worked so hard to complete this transaction in such good time – well ahead of plan.”
KKR buys controlling stake in Wella
In mid-May, as Cosmetics Design Editor Deanna Utroske reported, Coty announced an agreement to sell controlling stake in Wella, Clairol, OPI, and ghd. As Sylvie Moreau, President of Coty Professional Beauty remarked at the time, “Partnering with KKR, one of the worlds most respected and preeminent investment firms, will propel our people and our brands into a bright and successful new future.”
And this week KKR took over 60% of those brands’ business—now consolidated and known collectively as Wella.
Less debt more DTC beauty for Coty
Nabi, who joined the company as CEO in September, called the divesture “an important milestone in Coty’s transformation and the development of a stronger, more focused and flexible business that’s set up for long-term success,” in this week’s media release about the deal.
Explaining the company’s strategy going forward, she draws attention to the company’s Q1 earnings announcement and states, “we remain relentlessly focused on maintaining diligent cost control across the company and delivering on our financial commitments.”
“As such,” continues Nabi, “the Wella divestment reflects the excellent progress being made in improving Coty’s leverage profile. This substantial debt reduction will, in turn, enable us to increase investments behind our strategic priorities, including strengthening our business in core markets and categories, while simultaneously fueling our new growth engines: e-commerce and DTC, skincare, prestige make-up, and Asia.”
For the foreseeable future, the company is focused squarely on both its prestige and consumer beauty businesses.