Coty has offloaded its remaining 25.8% shareholding in Wella to KKR-managed entities for $750 million. This transaction also grants Coty 45% of future proceeds from Wella's eventual sale or IPO, beyond KKR's preferred return. The immediate cash infusion is earmarked for reducing Coty's substantial debt, aiming for a net leverage ratio of approximately 3x by the end of CY25. This move finalises Coty's 2020 strategic initiative to streamline its brand portfolio and operations.
Coty originally acquired Wella from Procter & Gamble in 2015 as part of a much larger $12.5 billion deal. The company's decision to exit its Wella investment signals a decisive pivot towards simplifying its business structure and focusing on core strengths. While Wella has demonstrated strong recent performance, Coty's primary objective appears to be financial deleveraging, a common strategy for large corporations seeking greater agility.
For UK salon and barbershop owners, this corporate reshuffling highlights the dynamic nature of the professional beauty sector's supply chain. Brands often change hands or shift strategic priorities. The ultimate impact on product availability, innovation, and pricing will depend on KKR's stewardship of Wella and Coty's renewed focus. What remains to be seen is how this separation influences Wella's product development pipeline and its commitment to the professional channels that form the bedrock of its business.
