NEW YORK, Nov. 2, 2015– Coty Inc. (NYSE:COTY) announced today that it has entered into a definitive agreement to acquire the personal care and beauty business (the “Beauty Business”) of Hypermarcas S.A. (BM&FBovespa:HYPE3) for approximately $1.0 billion (R$3.8 billion) in cash. The transaction will be funded with a combination of cash on hand and available debt facilities.
The Beauty Business is a $253.5 million (R$977.5 million) net revenue business as of 2014, with an offering of brands that hold leading positions in the highly competitive Brazilian beauty and personal care market, which is the third largest in the world. Brands that Coty would acquire include:
Monange – a multi-category personal care brand (body care, hair care, female deodorant)
Risqué – the market leader in nail polish in Brazil
Bozzano – the market leader in men’s care in Brazil
Paixão – largest skin care brand in Brazil
Biocolor – a best-selling hair colorant in Brazil
The Beauty Business comprises state of the art manufacturing and distribution facilities in the state of Goias, with critical mass go to market capabilities complemented by a proven management team. As a result, it provides an excellent platform to integrate the existing small Coty business as well as the larger Procter & Gamble Specialty Beauty business in Brazil. The latter is expected to be merged into Coty in the second half of calendar 2016, subject to regulatory clearances and other customary closing conditions.
Bart Becht, Interim CEO and Chairman of Coty, commented: “We are excited to announce the acquisition of the Beauty Business of Hypermarcas, a leading beauty and personal care business in one of the world’s most important retail markets. We expect that the strength of the brands, the impressive leadership team and its robust infrastructure will enhance Coty’s competitive position and very much complement our contemplated merger with the P&G Specialty Beauty Business. Today’s announcement is another step in our progression towards creating a pure-play global leader and challenger in Beauty.”
The transaction is subject to regulatory clearances and other customary closing conditions. The transaction is expected to be closed in two stages by end of March 2016.
As a reminder, Coty will release fiscal 2016 first quarter financial results before the open of the U.S. equity markets on the morning of Thursday, November 5, 2015. On that date, at 9:00 a.m. ET, Coty will webcast live its conference call discussing its results, business outlook and recent corporate developments, including the Beauty Business acquisition. Bart Becht and Patrice de Talhouët, Executive Vice President and Chief Financial Officer, will host the call. Those wishing to access the webcast can do so at http://investors.coty.com. The webcast will also be archived on the website.
About Coty Inc.
Coty is a leading global beauty company with net revenues of $4.4 billion for the fiscal year ended June 30, 2015. Founded in Paris in 1904, Coty is a pure play beauty company with a portfolio of well-known fragrances, color cosmetics and skin & body care products sold in over 130 countries and territories. Coty’s product offerings include such leading power brands as Adidas, Calvin Klein, Chloé, DAVIDOFF, Marc Jacobs, OPI, philosophy, Playboy, Rimmel and Sally Hansen.
For additional information about Coty Inc., please visit www.coty.com.
About Hypermarcas
Founded in 2001, Hypermarcas is Brazil’s national champion in pharmaceutical products. The company has 14% market share in units, ranking #1 in the market. It competes in all relevant segments of the sector, with leadership positioning in several of them.
The company is #1 in OTC drugs, with about 13% market share. It has leadership in segments such as flu symptoms, pain relief, antacids, among others. Its brands are widely traditional, established in the market for many years. In some cases, they are category icons, such as Benegrip, Engov, Rinosoro, Epocler, Estomazil, Atroveran, Alivium, Tamarine, among others.
In addition, the company is #1 in branded generics, with the Neo Química brand, which also ranks #3 in pure generics.
In RX drugs, the company has a portfolio of well-established brands in several markets, such as Predsim, Celestamine, Maxsulid, Diprospan, Mioflex-A. This segment is supported by a field team which visits more than 150,000 doctors monthly.
Hypermarcas also has leadership in other Consumer Health markets, such as #1 in condoms, with about 55% market share, under brands Jontex, Olla and Lovetex; #1 in nutritionals, with more than 50% market share, under brands Zero-Cal, Finn and Adocyl; #2 in dermocosmetics, sharing the leadership, under the Mantecorp Skincare brand.
The strength in the pharmaceutical market is based upon large-scale, low-cost operations, with one of the biggest drug manufacturing plants in the world. In addition, the company has robust distribution, both in the drugstore chains channel, as well as in traditional stores, reached by means of unique, exclusive distributors. This operating platform is supported by high marketing investments and an aggressive innovation policy, with continuous launches of new products.
For more information on Hypermarcas, please visit www.hypermarcas.com.br.
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