US beauty company Coty, is selling a majority stake of its beauty and haircare business to KKR & Co, the US firm that snapped up Arnott’s Biscuits last year, for US$4.3 billion.
Coty will receive about US$3 billion in cash as part of the deal, which will see the businesses divested as a standalone company, with KKR accquiring a 60 per cent stake and Coty retaining the rest.
The portfolio, which includes Wella and OPI, was valued at up to $7 billion earlier this year, according to Reuters, before the coronavirus pandemic devastated the business, forcing hair and nail salons around the world to shut their doors.
KKR is also investing US$1 billion in Coty, and will take two board seats, as part of the partnership to help the beauty business cut costs.
Peter Harf, founding partner of JAB and chairman of Coty said KKR’s investment and partnership will be “instrumental to strengthening Coty’s balance sheet and helping the company to achieve long-term growth in shareholder value”.
Johannes Huth, partner and head of KKR EMEA, said the firm is excited to support Coty through this uncertain period.
“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,” Huth said in a statement on Monday.
“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.”
Reuters reported that Henkel, which owns the Schwarzkopf hair care brand, and Unilever had also shown interest in the Coty brands.
Last July, KKR snapped up Australian biscuit company Arnott’s along with the rest of Campbell Soup Company’s international division for US$2.2 billion (AU$3.14 billion).