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KKR to acquire majority stake in Coty Professional Beauty

Coty and KKR signed a Memorandum of Understanding for KKR to acquire a majority stake in Coty’s Professional Beauty and Retail Hair Businesses at a contemplated enterprise value of $4.3 billion

Coty Inc. announced the signing of a Memorandum of Understanding (MOU) with investment firm KKR for the sale of a majority stake in Coty’s Professional Beauty and Retail Hair business, including Wella Professionals, Clairol, OPI, and ghd brands (together ‘Wella’), at a contemplated enterprise value of $4.3 billion.

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Under the terms of the MOU, Coty will carve out ‘Wella’ and its portfolio of professional brands into a standalone company in which KKR will acquire a 60% stake and Coty will retain the remaining 40% interest. Coty’s mass beauty business in Brazil will remain a fully owned business of Coty.

Sylvie Moreau, President of Coty Professional Beauty, said, “We are thrilled with this announcement. KKR is one of the world’s preeminent investment firms with an exemplary track record of value creation. As a market leader with one of the strongest portfolios of brands in the professional beauty market, we believe this partnership opens up a new set of opportunities for ‘Wella’, our people, and our brands.”

Johannes Huth, Partner and Head of KKR EMEA, said, “We are excited to form this partnership to invest in Coty to support it through this period of unprecedented global uncertainty and allow it to emerge as a stronger, more agile business, and to acquire a majority stake in Wella, a market leader with a strong portfolio of brands in the attractive professional hair market where we see significant opportunities to accelerate growth in partnership with its experienced leadership team. We look forward to working towards the establishment of a lasting and value-creating strategic partnership.”

“In this year where Wella Professionals is turning 140 years old, I am proud and inspired at the prospect of Wella operating again as a standalone Company. Partnering with KKR will propel our people and our brands into a bright and successful new future,” said Sylvie Moreau.

“This announcement represents a great milestone for our Wella India organisation. We are confident this partnership will bring new opportunities. In the meantime, we remain fully committed to supporting our customers and our industry as it bounces back from the Covid-19 crisis,” added Manish Bhagat, Country Manager, Coty India.        

KKR is expected to own 60% of ‘Wella’ and Coty 40%, subject only to completion of limited confirmatory due diligence and execution of definitive documentation. The agreement is expected to be signed by the end of May.

KKR has a long track record of investing in branded consumer businesses, including the beauty sector. Its portfolio includes 109 companies with over $157 billion in annual revenues and employing over 637,500 people.

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