The French-American Multinational Group has announced its intention to divest its retained Wella Stake. The first step will be selling a $150M (3.6%) Stake in Wella to IGF Wealth Management. Cash proceeds of the proposed transaction will be used to pay down debt. The Remaining 22.3% Stake will be sold by 2025.
Coty Inc., one of the world’s largest beauty companies with a portfolio of iconic brands across fragrance, colour cosmetics, hair care, skin and body care, announced that it has entered into a binding letter of intent to sell a portion of its Wella stake to the investment firm, IGF Wealth Management.
Coty will sell a 3.6% stake in Wella for $150 million, subject to the completion of due diligence, reflecting a 4% premium to the book value of Wella as of March 31, 2023. Following this transaction, which is expected to close in the next two months subject to certain closing conditions, Coty will retain a 22.3% stake in Wella with an implied valuation of approximately $900 million, with the intention to fully divest within a couple of years.
As a consequence, Coty’s position in the professional hair and Beauty global market will be reduced so as to improve its effort in other channels.
Laurent Mercier, Chief Financial Officer of Coty, said: “Today’s announcement is a milestone for Coty, as the partial monetization of our Wella stake reinforces the strength of our balance sheet, with no debt maturities in the next 2 years and our remaining Wella stake carrying an implied valuation of approximately $900 million. The expected transaction is a concrete step in our commitment to both fully divest our retained Wella stake and reach leverage of approximately 2x by the end of CY25. Coupling this deleveraging with a best-in-class medium-term growth algorithm, an active capital return program, including $400 million in targeted future share buybacks, and the continued momentum in our business, it is clear that we are reinforcing Coty’s position as a beauty powerhouse.”