Coty Announces Intent to Explore Strategic Options for Its Professional Beauty Business as Part of Next Step in Its Ongoing Transformation
Coty Inc. (NYSE: COTY) today announced that as part of its ongoing strategic review of its business, management and the Board of Directors have determined that moving forward the Company will focus more intently on its fragrance, cosmetics and skin care businesses. As a result, Coty is launching a process to explore strategic alternatives for its Professional Beauty business and associated hair brands, as well as the company’s Brazilian operations, including a divesture. The Company expects that the proceeds from any potential transaction will be used to pay down debt and return excess cash directly to shareholders.
These strategic initiatives are aligned with Coty’s previously announced turnaround plan focused on improving the company’s execution capabilities, better leveraging its assets and delivering significant financial improvements. After a thorough analysis, the management team and Board reached the conclusion that even with its strong current performance, the future growth opportunities of the Professional Beauty business lie increasingly outside the Company’s core strategic focus.
Pierre Laubies, Chief Executive Officer of Coty, said: “After stabilizing our operations in fiscal 2019, we announced in early July a plan to turn around Coty’s performance. Today’s announcement accelerates this transformation and will help reposition Coty as a more focused and agile company, deleverage our balance sheet, and improve our ability to invest in areas with the greatest growth potential. The Professional Beauty teams have done an incredible job over the past three years in creating a strong business platform, putting us in the favorable position to find the best owner for that business while unlocking significant value for Coty Shareholders and allowing us to further grow our core remaining businesses.”
Peter Harf, Chairman of the Board of Coty and Founder and Managing Partner of JAB Holdings, said: “This announcement has the full support of the Board, as well as the company’s largest shareholder, JAB Holdings. The strategic review of the Professional Beauty business aims at finding the best option to realize significant value for Coty and its shareholders. The Board is highly confident in Coty’s ability to leverage our unique portfolio of fragrance, cosmetics and skin care brands, and capture the growth of the beauty category.”