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