THE FACT THAT? Coty has sold its remaining 25.8 percent stake in professional hair care company Wella to investment vehicles managed by KKR, completing its full exit from the business.
THE DETAILS Under the terms of the transaction, Coty will receive $750 million in upfront cash, along with a right to 45 percent of any proceeds from a future sale or initial public offering of Wella, once KKR’s preferred return has been met.
The divestiture concludes a multi-year process that began in 2020, during which Coty progressively reduced its ownership in Wella as part of a broader effort to simplify its portfolio and operations. Coty said that based on Wella’s recent performance and current market valuations, the transaction could ultimately generate total gross proceeds close to the book value of its original investment.
THE WHY? Coty plans to use the majority of the net proceeds from the sale to reduce both short- and long-term debt, supporting its ongoing deleveraging strategy. Combined with continued free cash flow generation, the transaction is expected to reduce Coty’s net financial leverage to approximately three times by the end of calendar year 2025. The exit sharpens Coty’s strategic focus on its core fragrance, cosmetics and skin care businesses while strengthening its balance sheet.
Fountain: coty
