Written on: July 20, 2023 by SprayTM
Coty Inc. has entered into a binding letter of intent to sell a portion of its Wella stake to investment firm IGF Wealth Management.
Coty will sell a 3.6% stake in Wella for $150 million, subject to the completion of due diligence, reflecting a 4% premium to the book value of Wella as of March 31, 2023. Following this transaction, which is expected to close in the next two months subject to certain closing conditions, Coty will retain a 22.3% stake in Wella with an implied valuation of approximately $900 million. The announced transaction advances the company’s objectives to actively deleverage, including reaching its target of driving leverage towards 3x exiting CY23.
Laurent Mercier, Chief Financial Officer of Coty, said, “Today’s announcement is a milestone for Coty, as the partial monetization 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.
“The expected transaction is a concrete step in our commitment to both fully divest our retained Wella stake and reach leverage of approximately 2x by end of CY25,” Mercier added.