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 hair styling 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.