Exclusive: Unilever, Henkel and buyout funds eye bids for Coty's $7 billion beauty brands – sources
LONDON/FRANKFURT (Reuters) - Consumer goods giants Unilever (ULVR.L) and Henkel (HNKG_p.DE) and a series of buyout budget such as Advent and Cinven are speaking to U.S. Cosmetics maker Coty (COTY.N) to publish bids for some of its most popular splendor brands, three sources advised Reuters.
Coty, which has a marketplace price of $9 billion and is majority owned by using German conglomerate JAB Holdings, is expected to kick off an public sale manner in December to find a new owner for a portfolio of professional hair and nail care brands, the sources stated, speaking on situation of anonymity.
The portfolio, which incorporates Wella, Clairol, GHD and OPI among others, is really worth as much as $7 billion and has drawn interest from both enterprise players and financial traders, they said.
Colgate-Palmolive Co (CL.N) is among a number of consumer companies looking at add-on deals to grow their skin care units, the sources said.
New York-based Colgate Palmolive, which recently bought the skin care unit of France's Laboratoires Filorga Cosmétiques for 1.5 billion euros ($1.66 billion), is expected to enter the race for Coty's brands, facing competition from rivals Unilever and Henkel as well as heavyweight investment funds, the sources said.
The list of financial sponsors includes Advent, Blackstone (BX.N), KKR (KKR.N), CVC Capital Partners and BC Partners, they said.
One of the sources said Cinven was examining a possible joint bid for the brands.
Coty, Henkel, Colgate-Palmolive, Cinven, Advent, CVC and BC Partners declined to comment, while Unilever, Blackstone and KKR were not immediately available for comment.
Coty aims to complete the sale, which was announced last month, by the middle of 2020 and has hired Credit Suisse to handle discussions with prospective bidders.
Confidential records applications are anticipated to be dispatched in December so one can receiving non-binding offers early subsequent year, the sources said.
Bankers advising the prospective bidders estimate the portfolio should fetch 10 to twelve instances its center earnings of approximately $600 million, giving it a valuation of $6 to $7 billion, the resources stated.
Coty's expert beauty unit, which typically sells hair and nail care merchandise to salons, debts for approximately 21% of its total sales, with annual sales of approximately $1.Eighty one billion.
The unit, but, has seen falling sales in the closing 4 quarters, prompting Coty's choice to lessen its exposure to the professional segment.
Coty additionally owns different beauty manufacturers together with Rimmel and Max Factor as well as pores and skin care corporations Lancaster and Philosophy however has struggled for years to integrate the sort of extensive range of merchandise.
Its 2016 buy of a slice of Procter & Gamble's (PG.N) splendor business, which covered Covergirl and Max Factor, pressured it to take billions of greenbacks in write-downs and outline a four-yr restructuring plan.
Its debt load stood at $7.7 billion at the end of June.
Coty's boss Pierre Laubies said in October the sale would improve the company's ability to invest in areas with significant growth potential, but added that proceeds from any deal would be used to pay down debt and return excess cash to shareholders.
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Beauty and health