THE WHAT? Coty has announced that it has signed a definitive agreement to sell an approximate 9 percent stake in Wella to KKR in exchange for roughly half of KKR’s remaining convertible shares in Coty.
THE DETAILS Upon completion of the transaction, KKR will reduce its ownership to the equivalent of about 45 million Coty Class A shares, representing an estimated 5.2 percent stake.
“Our strategy for unlocking value expansion in Coty has remained consistent, anchored on three key objectives: accelerating our sales and profit growth, deleveraging our balance sheet, and simplifying our capital structure. Today’s announcement is a great step in advancing our balance sheet and capital structure objectives. With freed funds to drive growth and deleveraging, it is another milestone in transforming Coty into a beauty powerhouse,” Sue Y Nabi, Coty’s Chief Executive Officer, stated.
THE WHY? Laurent Mercier, Coty’s Chief Financial Officer, added, “The value of Wella has increased significantly since we undertook our partial divestment in 2020 and KKR became our strategic partner in the Wella business. Today’s announcement is a testament of our initial investment strategy of capitalizing on the expected increase in Wella’s value over time to further our dual agenda of deleveraging and simplifying Coty’s capital structure, with the added benefits of improving our cash flow and driving EPS accretion. Our remaining stake in Wella remains a key financial asset for Coty, which we expect to bring further value over time.”