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Coty Files for IPO, Seeks to Raise Up to $700 Million

Posted: June 29, 2012

Following its aborted attempt to acquire Avon Products Inc., Coty Inc. has pushed ahead with its initial public offering (IPO), today filing to raise up to $700 million for it. The beauty company—which owns brands such as Rimmel, OPI, Philosophy and the fragrance brands for Calvin Klein, Beyonce, Madonna and more—is majority owned by JAB Holdings II BV, an investment firm owned by the German family Reimanns, which also has stake in Reckitt Benckiser Plc, owner of consumer brands such as Clearasil and Veet. Additionally, the Warren Buffett-owned Berkshire Hathaway and private equity firm Rhone each own a 7.5% stake in Coty.

According to a Wall Street Journal article by Emily Glazer, “The offering will allow investors including Germany's wealthy Reimann family and the company's top officials to cash out some of their holdings. Coty itself won't see any proceeds from the IPO.”

According to the company’s IPO filing with the U.S. Securities and Exchange Commission, Coty posted a net income of $32.9 million on revenue of $3.58 billion for the nine months ending March 31, 2012. For the year ending this month, the company’s top 10 brands are expected to generate 70% of net revenue, also according to the filing, with fragrances accounting for 53% of the year's revenue, color cosmetics 30%, and skin and body care 17%.

In the filing, Coty noted plans to broaden its geographic reach and market share through new product innovation and new licenses, an expansion of its skin and body care division and products, and by exploring new opportunities for product distribution.

The company intends to list its stock on the Nasdaq or New York Stock Exchange under the symbol "COTY," and it hired Bank of America Corp., JPMorgan Chase & Co. and Morgan Stanley to manage the offer.