Coty considering sale of its professional hair, nail units

Bloomberg

Coty Inc, under pressure to turn its business around, is considering a sale of its professional hair and nail products unit that includes the brands Wella, Clairol and OPI.
The shares surged the most in more than five months.
The cosmetics company hired Credit Suisse to help it explore options for the professional business, which sells to salons and is expected to make $2.7 billion in sales this year. It’s also looking at a sale of its Brazilian operations, and expects a review to be completed by next summer, according to a statement.
A sale is expected to kick off this year and attract interest from both rival beauty companies and private equity firms, according to a person familiar with the matter.
Coty is open to reviewing bids for all and parts of the business as it aims to raise as much money as possible, said the person, who asked not to be identified because the details are private.
Coty has been formulating a comeback plan after a difficult few years. In July, CEO Pierre Laubies laid out the first steps of a turnaround plan intended to revive margins, reduce leverage and better keep up with its rivals. He said at the time some brands could be on the chopping block.
Coty may attract similar suitors that bid for Nestle SA’s skincare business, which it sold to a group led by EQT AB for $10.1 billion earlier this year. Other bidders for all or part of that business at the time included KKR & Co, PAI Partners, Advent International and Cinven as well as Colgate-Palmolive Co and Unilever NV, people familiar said at the time. German beauty and chemicals company Henkel AG had also previously looked to acquire Wella in 2015.
Proceeds from any potential transaction will be used to pay down debt and return excess cash directly to shareholders.