Coty to sell 150 million dollar stake in Wella

Cosmetics giant Coty has entered into an agreement to sell a 3.6 percent stake in hair care and beauty company Wella.

The binding letter of intent to sell comes in regards to a portion of Coty’s entire stake in Wella, for which it currently holds 25.9 percent.

Coty is planning to sell the 3.6 percent for 150 million dollars to investment firm IGF Wealth Management, in a transaction that it is expecting to close within the next two months following standard due diligence.

The group will then retain a 22.3 percent stake in Wella, which comes with an implied valuation of around 900 million dollars.

The deal builds on Coty’s plan to actively deleverage, a strategy that includes reaching a target of driving leverage towards 3x exiting CY25.

In a release, Coty’s chief financial officer, Laurent Mercier, said: "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 900 million dollars.”

On Coty’s deleveraging, Mercier added: “Coupling this deleveraging with a best-in-class medium term growth algorithm, an active capital return programme, including 400 million dollars in targeted future share buybacks, and the continued momentum in our business, it is clear that we are reinforcing Coty’s position as a beauty powerhouse.”