Transaction Further Strengthens Coty’s Worldwide Leading Position in
Professional Hair
NEW YORK--(BUSINESS WIRE)--Oct. 17, 2016--
Coty Inc. (NYSE: COTY) announced today that it has reached a definitive
agreement to acquire ghd (www.ghdhair.com),
a premium brand in high-end hairstyling appliances from Lion
Capital LLP for approximately ₤420 million (ca.USD$510 million)
in cash. The transaction will be funded with a combination of cash on
hand and available debt facilities. Upon closing, the acquisition is
expected to be immediately accretive to Coty’s earnings.
The addition of ghd’s market-leading and high-performance lines of hair
straighteners, hairdryers, curlers and other hairstyling appliances is
expected to further strengthen Coty’s worldwide leading position in the
professional hair category. ghd products represent the top of the range
in its category, attracting strong loyalty with both professionals and
consumers. ghd’s products are known for unsurpassed quality, beautiful
design and excellent performance, and will enable Coty to offer salon
partners and their clients an enhanced and more premium range of hair
solutions. Coty also aims to accelerate ghd’s strong track record of
growth through its channel and category capabilities combined with ghd’s
strong innovation pipeline, superior technology and robust technical
expertise.
ghd, which stands for “Good Hair Day,” generated ₤178 million in
revenues in fiscal year 2016. ghd is headquartered in London and has
commercial operations in the United Kingdom, Australia, the United
States, Germany, France, Spain, Italy and several other markets. The
company has been expanding from its core salon channel into premium
retail and e-commerce. ghd will become part of the Coty Professional
Beauty division, where it will be managed as a standalone business led
by its current CEO Anthony Davey and management team. Anthony Davey will
report to Sylvie Moreau, President of Coty Professional Beauty.
Commenting on the news, Camillo Pane, Coty Chief Executive Officer,
said: “We are pleased to bring ghd’s highly skilled management team and
its employees into Coty as we continue to strengthen our core business
through the addition of innovative market-leading brands and products.
ghd has beautifully designed and superior performing products, and is
the preferred choice for discerning professionals and consumers alike.
Not only do we expect ghd to strengthen our professional hair portfolio
and enable Coty to provide even better hair solutions, but we also
believe there is strong growth potential for ghd across several markets.”
Lyndon Lea, Partner of Lion Capital, said: “Over the three years of our
ownership, ghd grew worldwide sales by 30% through a strong pipeline of
innovative new products, which deepened the brand’s leadership in its
core markets and supported its successful entry into new hairstyling
categories. Anthony Davey and his management team have also done an
excellent job of expanding the brand internationally whilst meaningfully
strengthening ghd’s multichannel distribution capabilities. We are
pleased to be selling ghd to Coty, a global leader in the beauty
category, where it can take its rightful place among Coty’s unique
family of beauty brands.”
The transaction is subject to regulatory clearances and other customary
closing conditions, and is expected to close by the end of calendar year
2016.
Lion Capital and ghd were advised by Rothschild & Co. and Proskauer Rose
LLP. Skadden Arps Slate Meagher & Flom LLP acted as legal counsel for
Coty Inc.
About Coty Inc.
Coty is one of the world’s largest beauty companies with approximately
$9 billion in revenue, with a purpose to celebrate and liberate the
diversity of consumers’ beauty. Its strong entrepreneurial heritage has
created an iconic portfolio of leading beauty brands. Coty is the global
leader in fragrance, a strong number two in professional salon hair
color & styling, and number three in color cosmetics. Coty operates
three divisions – Coty Consumer Beauty, which is focused on color
cosmetics, retail hair coloring and styling products, body care and mass
fragrances sold primarily in the mass retail channels with brands such
as COVERGIRL, Max Factor and Rimmel; Coty Luxury, which is focused on
prestige fragrances and skincare with brands such as Calvin Klein, Marc
Jacobs, Hugo Boss, Gucci and philosophy; and Coty Professional Beauty,
which is focused on servicing salon owners and professionals in both
hair and nail, with brands such as Wella Professionals, Sebastian
Professional and OPI. Coty has approximately 20,000 colleagues globally
and its products are sold in over 130 countries. Coty and its brands are
committed to a range of social causes as well as seeking to minimize its
impact on the environment.
For additional information about Coty Inc., please visit www.coty.com.
About ghd
Good Hair Day, better known as ghd, is a global premium, electrical
styling brand that is in the business of transforming the lives of women
everywhere so that they can look and feel beautiful every day.
Game-changing innovation, cutting-edge technology, superior performance
and award-winning design are all hallmarks of the brand. Founded in 2001
by three British hairdressers, ghd straighteners were originally
developed exclusively for professional stylists and quickly developed a
cult following among professionals, consumers and celebrities alike.
Today, ghd is a multi-category, multi-channel brand with a range of
stylers, hairdryers and curling tongs, and is the number one
stylist-recommended and number one consumer-preferred brand in all of
its key markets. Based in the UK, the company has international
operations in Europe, Australia, South Africa, and the USA. For more
information, please visit www.ghdhair.com.
About Lion Capital
Lion Capital is a consumer-focused investor passionate about driving
growth through strong brands. With offices in Los Angeles and London,
the firm’s principals have led the investment of €6 billion in more than
30 businesses and more than 100 consumer brands across North America and
Europe. Lion’s focus on market-leading consumer-facing companies has led
to investments in such well-known brands as Kettle Foods, a leading
producer of all-natural snacking products; John Varvatos, the
award-winning men’s lifestyle brand; Perricone MD, a premium anti-aging
skincare brand; Jimmy Choo, the luxury shoe and accessories retailer;
and All Saints, a leading contemporary fashion brand with a global store
network. Lion Capital works in partnership with the management of its
companies to strategically transform the businesses in which it invests.
For more information, please visit www.lioncapital.com
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 purchase of ghd. These forward-looking
statements are generally identified by words or phrases, such as “aim”,
“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 ghd 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 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 ghd operates; competitive responses to the transaction;
litigation or investigations involving governmental authorities relating
to the transaction; uncertainty of the expected financial performance of
Coty following completion of the proposed transaction; the ability of
Coty to achieve market expansion contemplated by the proposed
transaction within the expected time frame; the ability of Coty to
promptly and effectively integrate and manage the ghd business as part
of the Coty Professional Beauty division; the effects of the business
combination of Coty and ghd, 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, 2016, 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/20161017005604/en/
Source: Coty Inc.
Coty:
Investor Relations
Kevin Monaco, 212-389-6815
or
Media
Jennifer
Friedman, 212-389-7175
or
Lion Capital:
Montfort
Communications
Rory King, +44 (0)203 770 7906
M: +44 (0)7917
086 227
E: king@montfort.london