Coty sells 60% share of Professional Beauty division for $4.3bn
By Scratch Staff | 12 May 2020 | Movers & Shakers, News
Coty‘s Professional Beauty and Retail Hair businesses, which include the OPI, Wella, Clairol and ghd brands, have sold a 60% stake to American private equity firm, KKR.
The estimated cost of the stake is $4.3 billion, and saw KKR fight off competition from Henkel. Coty will retain the remaining 40% interest in the business.
“Coty is a leader in the attractive global beauty market with iconic brands, global presence and scale, and a strong track record of innovation and growth,” comments Johannes Huth, partner & head of KKR EMEA. “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. We look forward to working towards the establishment of a lasting and value-creating strategic partnership.”
Global consultancy and research firm, Kline, comments on the deal: “With COVID-19 raging across the globe in earnest in early 2020, the professional beauty business has been among the hardest hit, with salon shutdowns bringing this high-touch service industry to a virtual halt. This has had a direct and immediate impact on Henkel, Coty, and many others, with industry revenues headed for a steep decline in 2020 and a long road ahead for recovery.
“While KKR will face challenges ahead with the Coty Professional Beauty business, Kline believes that the company will be able to adapt and focus its resources based on the changes in hair and nail salons, along with variations in consumer behaviour.”
“In Asia, which is further ahead in COVID-19 recovery, Coty is likely to make further inroads with its successful Wella colorants business in China, Japan, and South Korea. It is also advantaged in the U.S. market with its distribution strategy via Sally Beauty and position with independent stylists, as Kline expects more self-employed stylists in this new reality.
“Kline also expects the OPI professional nail care brand to seek greater retail and online sell-through, as nail salon businesses are likely to suffer the greatest closure casualties in professional beauty.”