Transaction Further Strengthens Coty’s
Worldwide Leading Position in Professional Hair
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.
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version on businesswire.com: http://www.businesswire.com/news/home/20161017005604/en/
Coty:Investor RelationsKevin Monaco,
212-389-6815orMediaJennifer Friedman, 212-389-7175orLion
Capital:Montfort CommunicationsRory King, +44 (0)203 770 7906M: +44
(0)7917 086 227E: king@montfort.london
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