Strong Position in the Brazilian Beauty & Personal Care Market
Provides Coty a Critical Mass Platform into the World's Third-Largest
Beauty Market
NEW YORK--(BUSINESS WIRE)--Nov. 2, 2015--
Coty Inc. (NYSE:COTY) announced today that it has entered into a
definitive agreement to acquire the personal care and beauty business
(the “Beauty Business”) of Hypermarcas S.A. (BM&FBovespa:HYPE3) for
approximately $1.0 billion (R$3.8 billion) in cash. The transaction will
be funded with a combination of cash on hand and available debt
facilities.
The Beauty Business is a $253.5 million (R$977.5 million) net revenue
business as of 2014, with an offering of brands that hold leading
positions in the highly competitive Brazilian beauty and personal care
market, which is the third largest in the world. Brands that Coty would
acquire include:
-
Monange – a multi-category personal care brand (body care, hair care,
female deodorant)
-
Risqué – the market leader in nail polish in Brazil
-
Bozzano – the market leader in men’s care in Brazil
-
Paixão – largest skin care brand in Brazil
-
Biocolor – a best-selling hair colorant in Brazil
The Beauty Business comprises state of the art manufacturing and
distribution facilities in the state of Goias, with critical mass go to
market capabilities complemented by a proven management team. As a
result, it provides an excellent platform to integrate the existing
small Coty business as well as the larger Procter & Gamble Specialty
Beauty business in Brazil. The latter is expected to be merged into Coty
in the second half of calendar 2016, subject to regulatory clearances
and other customary closing conditions.
Bart Becht, Interim CEO and Chairman of Coty, commented: “We are excited
to announce the acquisition of the Beauty Business of Hypermarcas, a
leading beauty and personal care business in one of the world’s most
important retail markets. We expect that the strength of the brands, the
impressive leadership team and its robust infrastructure will enhance
Coty’s competitive position and very much complement our contemplated
merger with the P&G Specialty Beauty Business. Today’s announcement is
another step in our progression towards creating a pure-play global
leader and challenger in Beauty.”
The transaction is subject to regulatory clearances and other customary
closing conditions. The transaction is expected to be closed in two
stages by end of March 2016.
As a reminder, Coty will release fiscal 2016 first quarter financial
results before the open of the U.S. equity markets on the morning of
Thursday, November 5, 2015. On that date, at 9:00 a.m. ET, Coty will
webcast live its conference call discussing its results, business
outlook and recent corporate developments, including the Beauty Business
acquisition. Bart Becht and Patrice de Talhouët, Executive Vice
President and Chief Financial Officer, will host the call. Those wishing
to access the webcast can do so at http://investors.coty.com.
The webcast will also be archived on the website.
About Coty Inc.
Coty is a leading global beauty company with net revenues of $4.4
billion for the fiscal year ended June 30, 2015. Founded in Paris in
1904, Coty is a pure play beauty company with a portfolio of well-known
fragrances, color cosmetics and skin & body care products sold in over
130 countries and territories. Coty’s product offerings include such
leading power brands as Adidas, Calvin Klein, Chloé,
DAVIDOFF, Marc Jacobs, OPI, philosophy, Playboy,
Rimmel and Sally Hansen.
For additional information about Coty Inc., please visit www.coty.com.
About Hypermarcas
Founded in 2001, Hypermarcas is Brazil’s national champion in
pharmaceutical products. The company has 14% market share in units,
ranking #1 in the market. It competes in all relevant segments of the
sector, with leadership positioning in several of them.
The company is #1 in OTC drugs, with about 13% market share. It has
leadership in segments such as flu symptoms, pain relief, antacids,
among others. Its brands are widely traditional, established in the
market for many years. In some cases, they are category icons, such as
Benegrip, Engov, Rinosoro, Epocler, Estomazil, Atroveran, Alivium,
Tamarine, among others.
In addition, the company is #1 in branded generics, with the Neo Química
brand, which also ranks #3 in pure generics.
In RX drugs, the company has a portfolio of well-established brands in
several markets, such as Predsim, Celestamine, Maxsulid, Diprospan,
Mioflex-A. This segment is supported by a field team which visits more
than 150,000 doctors monthly.
Hypermarcas also has leadership in other Consumer Health markets, such
as #1 in condoms, with about 55% market share, under brands Jontex, Olla
and Lovetex; #1 in nutritionals, with more than 50% market share, under
brands Zero-Cal, Finn and Adocyl; #2 in dermocosmetics, sharing the
leadership, under the Mantecorp Skincare brand.
The strength in the pharmaceutical market is based upon large-scale,
low-cost operations, with one of the biggest drug manufacturing plants
in the world. In addition, the company has robust distribution, both in
the drugstore chains channel, as well as in traditional stores, reached
by means of unique, exclusive distributors. This operating platform is
supported by high marketing investments and an aggressive innovation
policy, with continuous launches of new products.
For more information on Hypermarcas, please visit www.hypermarcas.com.br.
Forward-Looking Statements
Certain statements in this communication are forward-looking statements.
These forward-looking statements reflect Coty’s current views with
respect to the completion of the transaction with Hypermarcas S.A.
(“Hypermarcas”). These forward-looking statements are generally
identified by words or phrases, such as “anticipate,” “expect,”
“should,” “would,” “could,” “intend,” “plan,” “project,” “seek,”
“believe,” “will,” “opportunity,” “potential,” and similar words or
phrases. Actual results may differ materially from the results predicted
due to risks and uncertainties including inaccuracies in our assumptions
in evaluating the transaction, difficulties in integrating the Beauty
Business into Coty and other difficulties in achieving the expected
benefits of the transaction. All statements in this communication, other
than those relating to historical information or current conditions, are
forward-looking statements. We intend these forward-looking statements
to be covered by the safe harbor provisions for forward-looking
statements in the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to a number of risks and
uncertainties, many of which are beyond the control of Coty, which could
cause actual results to differ materially from such statements.
Risks and uncertainties relating to the proposed transaction with
Hypermarcas include, but are not limited to: uncertainties as to the
timing of the transaction; the risk that regulatory or other approvals
required for the transaction are not obtained or are obtained subject to
conditions that are not anticipated; economic conditions with respect to
the markets in which the Beauty Business operates; competitive responses
to the transaction; litigation relating to the transaction; uncertainty
of the expected financial performance of Coty following completion of
the proposed transaction; the ability of Coty to achieve synergies or
market expansion contemplated by the proposed transaction within the
expected time frame; the ability of Coty to promptly and effectively
integrate the Beauty Business into Coty; the effects of the business
combination of Coty and the Beauty Business, including Coty’s future
financial condition, operating results, strategy and plans; and
disruption from the proposed transaction making it more difficult to
maintain relationships with customers, employees or suppliers.
The foregoing review of important factors should not be construed as
exhaustive and should be read in conjunction with the other cautionary
statements that are included elsewhere. More information about potential
risks and uncertainties that could affect Coty’s business and financial
results is included under “Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” in Coty’s
Annual Report on Form 10-K for the fiscal year ended June 30, 2015, and
other periodic reports Coty has filed and may file with the Securities
and Exchange Commission from time to time. Any forward-looking
statements made in this communication are qualified in their entirety by
these cautionary statements, and there can be no assurance that the
actual results or developments anticipated by us will be realized or,
even if substantially realized, that they will have the expected
consequences to, or effects on, us or our business or operations. Except
to the extent required by applicable law, Coty undertakes no obligation
to update publicly or revise any forward-looking statement, whether as a
result of new information, future developments or otherwise.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151102005784/en/
Source: Coty Inc.
Coty Inc.
Investor Relations:
Kevin Monaco, 212-389-6815
or
Corporate
Communications:
Jessica Baltera, 212-389-7584