Coty has sold its remaining 25.8% stake in Wella to KKR-managed capital accounts and investment affiliates. 

The sale completes the program initiated in 2020 to simplify Coty’s portfolio and operations, while realizing the full value of its Wella business.

Laurent Mercier, Coty’s CFO, said, 

“This transaction marks a pivotal milestone for Coty – both in our transformation and in our long-running deleveraging commitment. Our strategic partnership with KKR has proven highly value accretive. We have benefited from Wella’s strong growth by progressively monetizing our stake, allowing us to strengthen Coty’s financial foundations year-after-year. Completing this transaction exactly inline with our original target to fully divest Wella by the end of CY25 underscores our focus on delivering on our financial commitments and crystallizing value from non-core assets, all while sharpening our strategic focus.”

Under the terms of the transaction, Coty will receive upfront cash consideration of $750 million and 45% of any proceeds from a further sale or an initial public offering of the business, after KKR’s preferred return has been met. 

Coty intends to use the vast majority of the Wella upfront cash proceeds related to this transaction, net of tax, to pay down its short term and long-term debt. 

Both the Wella proceeds and Coty’s strong free cash flow generation are expected to reduce Coty’s financial net leverage to ~3x by the end of CY25.

Based on Wella’s strong recent and expected performance, as well as current market valuations, Coty sees strong potential for additional cash proceeds, bringing the total gross proceeds closer to the carrying value of its investment in Wella. 

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