Coty Inc. agreed to pay $600 million in cash for a majority stake in Kylie Jenner’s cosmetics line, the latest move by a major beauty company to acquire trendy brands that appeal to a younger clientele.
The makeup and fragrance giant will have overall responsibility for the portfolio, while Jenner, part of the Kardashian clan, will lead creative efforts and communications, the companies said Monday. The deal values Kylie Cosmetics, which Jenner, 22, started in 2015 as a line of lip kits when she was still a teenager, at about $1.2 billion.
The biggest beauty companies have been on an acquisition spree in recent years as they hope to court younger shoppers with upstart brands. Estee Lauder Cos. bought its remaining two-thirds stake in Korean skin-care company Have & Be Co. for around $1.1 billion on Monday and Japan’s Shiseido spent $845 million to buy clean beauty brand Drunk Elephant in October.
Coty shares rose as much as 4.9% to $12.49 in New York Monday. They had already soared 82% this year through Friday.
Coty has been under pressure to turn its business around, having taken a $965 million writedown this year on brands it bought from Procter & Gamble in 2015. It’s in the first stages of a plan where its seeking a sale of its professional hair and nail brands, such as Wella, Clairol and OPI. The Kylie deal is a “key milestone” in Coty’s transformation, the company said in the statement.
“While the financial implications will be somewhat limited, this transaction, along with Coty exploring strategic options for Professional Beauty, shows that management is moving quickly and aggressively to evolve its portfolio to faster growing channels,” Wells Fargo analyst Joe Lachky said in a note. He rates Coty market perform and has a $13 price target on the shares.
The deal solidifies the status of Jenner as one of the youngest billionaires in the world, according to the Bloomberg Billionaires Index, capitalizing off her family’s fame from the reality series “Keeping Up With the Kardashians.”
Jenner’s line of lip kits paired a liquid lipstick with pencil lip liner. Now the business sells everything from eyebrow gel to skin care like face scrubs and sunscreen oil. First sold only online, her products became permanently available in stores nationwide in late 2018 through beauty retailer Ulta, which has more than 1,100 shops across the U.S.
Source: Bloomberg
Can’t stop reading? Read more
Apollo-backed Athora acquires PIC for £5.7bn in landmark UK pension deal
Apollo-backed Athora acquires PIC for £5.7bn in landmark UK pension deal Athora, the European insurance group backed by Apollo Global Management, has acquired Pension Insurance Corporation (PIC) for £5.7bn, in a deal that significantly expands its footprint in the...
BOSQAR and MidEuropa back €100m Mlinar deal to expand Future Food vertical
BOSQAR and MidEuropa back €100m Mlinar deal to expand Future Food vertical BOSQAR INVEST has acquired a controlling stake in leading Adria-region bakery group Mlinar in a €100m transaction backed by European private equity firm MidEuropa. The deal, which includes a...
Apollo acquires Suma Capital’s 30% stake in TradeInn to accelerate global sporting goods growth
Apollo acquires Suma Capital’s 30% stake in TradeInn to accelerate global sporting goods growth Triton has finalised its acquisition of Apollo has acquired a 30% stake in Spanish e-commerce leader TradeInn through its Hybrid Value funds, succeeding Suma Capital as a...