Coty (NYSE:COTY) today announced the completion of the sale of its remaining 25.8% stake in Wella to KKR-managed capital accounts and investment affiliates.
The deal, which brings upfront cash consideration of $750 million, also includes a 45% share in any future proceeds from a sale or potential initial public offering (IPO) of the business, after KKR’s preferred return is met.
The transaction is part of Coty’s ongoing portfolio simplification strategy, initiated in 2020, which aims to maximize the value of its Wella business.
Given Wella’s strong recent performance and favorable market valuations, Coty anticipates additional proceeds from future developments, potentially bringing the total gross proceeds closer to the carrying value of its initial investment.
Coty plans to use the majority of the Wella sale’s upfront cash proceeds, net of tax, to reduce both short-term and long-term debt.
Alongside these proceeds, Coty’s strong free cash flow generation — expected to exceed $350 million in the first half of FY26 — is anticipated to lower the company’s financial net leverage to approximately 3x by the end of calendar year 2025.