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Published May 11, 2020
Published May 11, 2020

Coty announced a strategic partnership with global investment firm KKR to sell a majority stake in its professional beauty and retail hair businesses in a deal valued at $4.3 billion or 12.3x 2019 EBITDA.

WHO: Coty is one of the world’s largest beauty companies with an iconic portfolio of brands across fragrance, color cosmetics, hair color and styling, and skin and body care. Coty is the global leader in fragrance, a strong number two in professional hair color and styling, and number three in color cosmetics. Coty’s products are sold in over 150 countries around the world. The professional portfolio includes Wella Professionals, System Professional, Nioxin, Sebastian Professional, Londa Professional, Sassoon Professional, Clairol Professional, Wella Color Charm, OPI, and ghd.

KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, and real estate, and credit, with strategic partners that manage hedge funds.

IN THEIR OWN WORDS: Peter Harf, Founding Partner of JAB and Chairman of Coty, commented in a statement: “We are thrilled to enter into this strategic partnership with KKR, one of the world’s preeminent investment firms with an exemplary track record of value creation. Their investment and partnership will be instrumental in 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 in a statement: “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. 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.”

Pierre-André Terisse, Coty COO and CFO, added in a statement: “Today’s announcement with KKR provides an increased sense of energy and excitement for all of us at Coty. As part of a number of steps to continue Coty’s transformation, the strategic partnership with KKR is clearly the most game-changing. We will see immediate improvement to our balance sheet and are in the final stages of finalizing a 60/40 partnership for our Professional Beauty and Retail Hair businesses. In the shadow of a global lockdown, we have also announced a comprehensive plan to reduce fixed costs by $700 million, which allows us to confirm our target to reach mid-teens operating margins by FY23. Overall, this alliance and the steps we are taking to strengthen our businesses will be key elements of our transformation.”


  • Effective immediately, Coty has agreed to issue $750 million of convertible preference shares and KKR is fully subscribing to the issue. These shares will carry a coupon of 9% and will be convertible into Coty shares at $6.24, equating to a 20% premium to Coty’s closing stock price on May 8, 2020 of $5.20.
  • KKR will be entitled to two seats on Coty’s Board of Directors following the completion of the transaction.
  • Coty and KKR have signed an MOU and are engaged in exclusive talks to form a partnership for Wella at an enterprise value of $4.3 billion, in which KKR is expected to own 60% and Coty 40%, subject only to completion of limited confirmatory due diligence and execution of definitive documentation.
  • Upon signing of the Wella transaction, Coty will issue $250 million of additional convertible preference shares to KKR with the same coupon and strike price provisions as the first $750 million tranche, resulting in incremental total proceeds of $3.3 billion.
  • KKR is making the investment through its North American Fund XII and European Fund V.
  • AFW LP and Credit Suisse are serving as financial advisors to Coty, and Skadden, Arps, Slate, Meagher & Flom LLP are serving as legal counsel to Coty.
  • Coty’s mass beauty business in Brazil will remain a fully owned business of Coty.

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