Coty Inc. has completed the sale of a majority stake in Wella, which includes Clairol, OPI and ghd brands, to KKR.
Previously: Coty/KKR Deal Completed by November 30
As part of the transaction, Coty has received net cash proceeds of approximately $2.5 billion, and will retain a 40% stake in the business.
Coty expects to utilize approximately $2 billion of the net proceeds to pay down its term loans A and B on a pro rata basis, with the remainder used for general corporate purposes, including initially paying down its revolver.
Following the Wella divestment, Coty is expected to reduce its financial net debt from $7.9 billion to stand below $4 billion.
Sue Y. Nabi, Coty's CEO, said, "Today marks 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. As noted on our Q1 earnings announcement, we remain relentlessly focused on maintaining diligent cost control across the company and delivering on our financial commitments. As such, 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, skin care, prestige makeup and Asia."
Nabi added, "The Wella sale is also a key part of the simplification of Coty: streamlining our structure to focus on our two core businesses: Prestige Beauty and Consumer Beauty. Nevertheless, I am very pleased that Coty will still share in Wella’s success through our remaining 40% stake."
