Coty Inc. (COTY) Exits Wella in a $750 Million Agreement with KKR

Core Insights - Coty Inc. has sold its remaining 25.8% stake in the hair care business Wella to KKR for $750 million, marking the conclusion of a portfolio streamlining program initiated in 2020 [2] - The resignation of CEO Sue Nabi has led to downgrades from multiple analysts, with Evercore ISI lowering its rating from Outperform to In Line and Grupo Santander downgrading from Outperform to Neutral [3][4] - Coty derives 65% of its revenue from premium beauty products, primarily fragrances, and 35% from mass makeup, skin care, and fragrances [5] Group 1 - Coty Inc. has exited Wella in a $750 million agreement with KKR, retaining 45% of future sale proceeds after KKR's preferred return [2] - The majority of the proceeds from the Wella sale will be used to pay off debt [2] - The company is undergoing a strategic evaluation of its beauty division, which may lead to further brand sales [2] Group 2 - Following CEO Sue Nabi's resignation, Evercore ISI downgraded Coty to In Line with a price target of $7, citing reliance on Nabi for the investment thesis [3] - Grupo Santander also downgraded Coty to Neutral with a price target of $3.50, indicating that the leadership change may extend the company's transition phase [4] - Analysts express concerns about the timing and triggers for a potential value unlock for Coty shares [3]