Coty agrees deal for Wella Professionals and ghd

Global investment firm KKR set to acquire a majority share in Coty Professional Beauty, which includes Wella Professionals, ghd, Clairol and OPI

Coty is set to agree a deal with global investment firm, KKR, for the sale of a majority stake in Coty’s Professional Beauty and Retail Hair business, including Wella Professionals, Clairol, OPI and ghd brands (together as ‘Wella’).

Under the terms of the deal, which has a ‘contemplated enterprise value of $4.3 billion’,  Wella Professionals, ghd and the portfolio of professional brands will form a standalone company in which KKR will acquire a 60% stake, and Coty will retain the remaining 40% interest. Coty’s mass beauty business in Brazil will remain a fully owned business of Coty.

Sylvie Moreau, President of Coty Professional Beauty, commented: “KKR is one of the world’s preeminent investment firms with an exemplary track record of value creation. As a market leader with one of the strongest portfolios of brands in the professional beauty market, we believe this partnership opens up a new set of opportunities for Wella, our people, and our brands.”

Global private equity firm KKR has a long track record of investing in branded consumer businesses, including the beauty sector. Its portfolio includes 109 companies with more than $157 billion in annual revenues.

Johannes Huth, Partner and Head of KKR EMEA, said: “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. We look forward to working towards the establishment of a lasting and value-creating strategic partnership.”

“This announcement represents a great milestone for our Wella and OPI UK & Ireland organisation. We are confident this partnership will bring new opportunities. In the meantime we remain fully committed to supporting our customers and our industry as it bounces back from the COVID-19 crisis,” added UK and Ireland general manager, Nick van Holstein.

The agreement is expected to be signed by the end of May, subject to completion due diligence and execution of definitive documentation. Coty acquired the Professional Beauty and Retail Hair brands in 2016 from Procter & Gamble.