Coty Inc. COTY announced today that it has entered into a definitive
agreement to acquire the personal care and beauty business (the "Beauty
Business") of Hypermarcas S.A. (BM&FBovespa:HYPE3) for approximately $1.0
billion (R$3.8 billion) in cash. The transaction will be funded with a
combination of cash on hand and available debt facilities.
The Beauty Business is a $253.5 million (R$977.5 million) net revenue
business as of 2014, with an offering of brands that hold leading positions
in the highly competitive Brazilian beauty and personal care market, which
is the third largest in the world. Brands that Coty would acquire include:
-- Monange -- a multi-category personal care brand (body care, hair care,
female deodorant)
-- Risqué -- the market leader in nail polish in Brazil
-- Bozzano -- the market leader in men's care in Brazil
-- Paixão -- largest skin care brand in Brazil
-- Biocolor -- a best-selling hair colorant in Brazil
The Beauty Business comprises state of the art manufacturing and
distribution facilities in the state of Goias, with critical mass go to
market capabilities complemented by a proven management team. As a result,
it provides an excellent platform to integrate the existing small Coty
business as well as the larger Procter & Gamble Specialty Beauty business in
Brazil. The latter is expected to be merged into Coty in the second half of
calendar 2016, subject to regulatory clearances and other customary closing
conditions.
Bart Becht, Interim CEO and Chairman of Coty, commented: "We are excited to
announce the acquisition of the Beauty Business of Hypermarcas, a leading
beauty and personal care business in one of the world's most important
retail markets. We expect that the strength of the brands, the impressive
leadership team and its robust infrastructure will enhance Coty's
competitive position and very much complement our contemplated merger with
the P&G Specialty Beauty Business. Today's announcement is another step in
our progression towards creating a pure-play global leader and challenger in
Beauty."
The transaction is subject to regulatory clearances and other customary
closing conditions. The transaction is expected to be closed in two stages
by end of March 2016.
As a reminder, Coty will release fiscal 2016 first quarter financial results
before the open of the U.S. equity markets on the morning of Thursday,
November 5, 2015. On that date, at 9:00 a.m. ET, Coty will webcast live its
conference call discussing its results, business outlook and recent
corporate developments, including the Beauty Business acquisition. Bart
Becht and Patrice de Talhouët, Executive Vice President and Chief
Financial Officer, will host the call. Those wishing to access the webcast
can do so at http://investors.coty.com. The webcast will also be archived on
the website.
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