KKR to take majority stake in Coty’s hair care, professional beauty units

Coty and private equity firm KKR have inked a partnership that will give KKR a majority stake in Coty’s professional beauty and retail hair businesses. The current plan calls for Coty to spin its Wella brand off into a stand-alone company that will be 60% owned by KKR and include the Clairol, OPI and ghd brands.

The agreement values the brands at $4.3 billion and also expects that Coty the majority divestment of Wella will net the beauty company roughly $3 billion. Coty would retain 40% interest in the stand-alone company.

The move, which accompanies a $750 million equity investment from KKR and will include an incremental convertible preferred investment of $250 million from KKR, is expected to help deleverage the company’s balance sheet and set it on a path to long-term growth and investment in its core portfolio, the companies said.