Coty News: COTY Stock Shoots 20% Higher on Turnaround Plans

Coty (NYSE:COTY) is in the news Monday after announcing a transformation plan for its business boosted its stock higher.

Coty News: COTY Stock Shoots 20% Higher on Turnaround Plans

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Here’s what COTY shareholders need to know about the turnaround plans.

  • Coty is entering into a transaction agreement with KKR for its Professional and Retail Hair business.
  • That includes its Wella, Clairol, OPI, and ghd brands.
  • This agreement values the business at $4.3 billion.
  • The business will operate as a separate entity from Coty.
  • KKR will hold a 60% stake in the business, while Coty will own the remaining 40%.
  • The deal is set to close within the next six to nine months.
  • To go along with this, KKR is investing $1 billion in Coty through convertible preferred shares.
  • The company says the benefit of this is simplifying its portfolio and allowing it to better focus on its Prestige and Mass Beauty businesses.
  • Coty notes that it expects this to result in “strong financial improvement at Coty through FY23.”
  • The transformation plan news from Coty also includes changes to its leadership team.
  • This has current chairman Peter Harf taking over as the CEO of the company.
  • It’s also creating an Executive Committee made up of three people.
  • The three people making up the committee are Harf, COO and CFO Pierre-André Terisse, as well as its new chief transformation officer Gordon von Bretten.
  • This group will allow for it to make quicker decisions.
  • The company also notes that it will make it more clear who is accountable for the company’s decisions.

COTY stock was up 20.2% as of Monday afternoon.

As of this writing, William White did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2020/06/coty-news-boosts-stock-on-turnaround-plan/.

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