Beauty goods giant Coty has entered into an agreement to sell a portion of its Wella stake to investment firm IGF Wealth Management.
Coty will sell a 3.6% stake in the hair care and styling brand for $150m, subject to the completion of due diligence. Following the transaction, which is expected to close in the next two months, Coty will retain a 22.3% stake in Wella with an implied valuation of approximately $900m.
The move follows the US firm selling a majority stake in Wella to private equity firm KKR for about $2.5bn in 2020 as part of a drive to cut debt and simplify its structure.
Laurent Mercier, Chief Financial Officer of Coty, commented: “Today’s announcement is a milestone for Coty, as the partial monetisation of our Wella stake reinforces the strength of our balance sheet, with no debt maturities in the next two years and our remaining Wella stake carrying an implied valuation of approximately $900m.
“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 end of CY25.”
