Coty Inc. has completed the long-anticipated sale of its professional division.
The company said Tuesday that it had closed a deal to sell a majority stake in Wella, OPI and Clairol to a joint venture that is majority owned by private equity firm KKR.
As part of the deal, Coty is taking home $2.5 billion in cash, which it will use to reduce leverage. The company plans to reduce net debt from about $7.9 billion to about $5 billion by the end of the second quarter of 2021, it said in a statement. That move, combined with Coty’s remaining 40 percent ownership position in the joint venture, would put “economic net debt” below $4 billion, which Coty says will increase its flexibility to invest behind key brands and “navigate a dynamic operating environment.”
Under chief executive officer Sue Nabi, Coty has plans to invest in skin care for the KKW and Kylie Jenner brands.
“This substantial debt reduction will, in turn, enable us to increase investments behind our strategic priorities, including strengthening our business in core markets and categories, while simultaneously fueling our new growth engines: e-commerce and direct-to-consumer, skin care, prestige makeup and Asia,” Nabi said in a statement.
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