Coty Sells Remaining 25.8% Stake in Wella for $750 Million
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: Businesswire
- Transaction Completion: Coty has sold its remaining 25.8% stake in Wella to KKR for $750 million, marking the successful completion of its portfolio simplification strategy initiated in 2020, which enhances the company's financial stability.
- Financial Improvement: The transaction positions Coty to potentially receive additional proceeds from Wella's future sales or IPO, which could bring total proceeds closer to the carrying value of its investment, thereby strengthening the company's capital structure.
- Debt Management: Coty intends to use the majority of the cash proceeds from this transaction to pay down short-term and long-term debt, with expectations to reduce its financial net leverage to approximately 3x by the end of 2025, significantly improving financial health.
- Strategic Focus: CFO Laurent Mercier stated that this transaction marks a pivotal milestone in the company's transformation and reflects the value creation from its strategic partnership with KKR, further solidifying its commitment to divesting non-core assets.
COTY
$3.25+Infinity%1D
Analyst Views on COTY
Wall Street analysts forecast COTY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for COTY is 4.85 USD with a low forecast of 3.50 USD and a high forecast of 10.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
2 Buy
11 Hold
2 Sell
Hold
Current: 3.260
Low
3.50
Averages
4.85
High
10.00
Current: 3.260
Low
3.50
Averages
4.85
High
10.00
About COTY
Coty Inc. is a beauty company with a portfolio of brands across fragrance, color cosmetics, and skin and body care. The Company has a diverse portfolio of brands, which includes both owned and licensed. Its brand portfolio is classified into two segments: Consumer beauty and Prestige. The consumer beauty brands include Adidas, Beckham, Bozzano, Bourjois, Bruno Banani, CoverGirl, Jovan, Mexx, LeGer by Lena Gercke, Monange, Nautica, Paixao, Rimmel, Risque, Sally Hansen, and Vera Wang. Its prestige brands include Burberry, Calvin Klein, Chloe, Davidoff, Escada, Gucci, Hugo Boss, Jil Sander, Kylie Cosmetics by Kylie Jenner, Lancaster, Marc Jacobs, Miu Miu, Orveda, and Tiffany & Co. Its mass beauty brands are primarily sold through hypermarkets, supermarkets, drug stores and pharmacies, mid-tier department stores, traditional food and drug retailers, and dedicated e-commerce retailers. It markets, sells and distributes its products in over 120 countries and territories.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
