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
BlackRock Acquires Global Infrastructure Partners for $12.5 Billion
BlackRock (BLK) is buying Global Infrastructure Partners for $12.5 billion, as the world's largest asset manager expands its focus on infrastructure. BlackRock will pay $3 billion in cash and roughly 12 million shares of its common stock for the infrastructure fund...
Canada’s Top Pension Funds Embark on Major Private Credit Expansion with C$1.3 Trillion in Assets
Six of Canada's biggest pension funds managing C$1.3 trillion ($965.47 billion) in assets have begun a major expansion into private credit, moving into an area previously dominated by banks.Canada Pension Plan (CPP) Investments, Ontario Teachers' Pension Plan (OTPP),...
Iberdrola and Norges Bank Boost Renewable Alliance with Over €2 Billion Investment in Spain and Portugal
Iberdrola and the Norwegian sovereign wealth fund, managed by Norges Bank Investment Management, are to double their clean energy investment alliance, adding 1,300 MW of additional renewable energy capacity to unlock more than €2 billion joint investment over the next...