Coty Inc. Announces Acquisition of Hypermarcas' Beauty & Personal Care Business, ~$1.0B In Cash

Coty Inc.

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.