Cosmetics maker Coty (NYSE:COTY) on Monday said it had agreed to sell a majority stake in its professional beauty and retail hair businesses, including Wella and Clairol brands, to investment firm KKR in a deal valued at $4.3 billion.
Coty said it would receive about $3 billion in cash from the divestment.
The private-equity firm will also invest an additional $1 billion and get two board seats as part of the partnership, the company said.
Coty said that under the deal, which also includes the OPI and ghd brands, the businesses will operate as a standalone company, with KKR acquiring a 60% stake and Coty retaining the rest.
New York-based Coty said its mass beauty business in Brazil will remain a fully owned business of Coty.
Coty also said third-quarter sales declined 23% on a reported basis to $1.53 billion in the three months ended March 31.
Coty COO Pierre-André Terisse, added: "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."
Coty shares picked up 26 cents, or 5%, to $5.46.
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