Coty Inc. is officially planning to sell its Professional Beauty business by 2020, with the company today announcing that moving forward, it will be focusing more intently on its fragrance, cosmetics and skincare businesses.
Swiss multinational investment bank and financial services company, Credit Suisse, has been appointed to explore options for Coty’s professional portfolio, including OPI, ghd, Wella and Clairol, as well as its Brazillian operations. It is anticipated the process will be completed by winter 2020.
All together, the businesses are set to generate US$2.7 billion in net sales for fiscal year 2019. According to a report by The Financial Times, the beauty company expects to produce between US$8 billion and US$9 billion in a deal, with Coty saying the “company expects the proceeds from any potential transaction will be used to pay down debt and return excess cash directly to shareholders.”
“After stabilising our operations in fiscal 2019, we announced in early July a plan to turn around Coty’s performance,” Coty CEO, Pierre Laubies, said. “Today’s announcement accelerates this transformation and will help reposition Coty as a more focused and agile company, deleverage our balance sheet, and improve our ability to invest in areas with the greatest growth potential.”
Coty chairman of the board, Peter Harf, also added that the decision has the full support of the Board, as well as the company’s largest shareholder, JAB Holdings.
“The strategic review of the Professional Beauty business aims at finding the best option to realise significant value for Coty and its shareholders," he said. "The Board is highly confident in Coty’s ability to leverage our unique portfolio of fragrance, cosmetics and skincare brands, and capture the growth of the beauty category."
