Coty owners to raise up to $1.1 bn IPO

Coty Inc, one of the world's largest fragrance and beauty products company, yesterday said that it is planning to raise up to $1.1 billion through an initial public offering (IPO),

The New York-based company, which makes fragrances under names of celebrities including Jennifer Lopez, David Beckham, Jennifer Lopez, Celine Dion and Halle Berry, said all the shares in the IPO would be offered by its three biggest shareholders, Joh A Benckiser GmbH and private equity firms Berkshire Partners and Rhone Capital.

Vienna-based Joh A Benckiser is the German holding company that manages the interests of the billionaire Reimann family of Germany, who also own a substantial stake in Reckitt Benckiser, the world's largest maker of household cleaners.

Joh A Benckiser, which holds nearly 82 per cent of Coty, plans to sell 43.6 million shares, or 14 per cent of its holdings, in the IPO, while Boston-based Berkshire Partners and New York-based Rhone holding 7.1 per cent stake each, plan to sell 6.8 million shares each, reducing their respective stakes to 6.6 per cent.

Coty, which failed to buy Avon Products for $10.7 billion last year, said that it will not receive any of the IPO proceeds (See: Coty withdraws $10.7-bn Avon bid) Coty owners plan to sell 57.1 million shares for between $16.50 and $18.50 each, at a midpoint range, the IPO would generate just under $1 billion.

Coty plans to list on the New York Stock Exchange and lead underwriters include Bank of America Merrill Lynch, JPMorgan, Morgan Stanley, Barclays, Deutsche Bank Securities and Wells Fargo Securities, who will have the option of buying an additional 8.6 million shares.

With annual turnover of around $3.6 billion, Coty was founded in Paris in 1904 by François Coty, who is credited with founding the modern fragrance industry. The company holds a 48-per cent share of the US fragrance market.

The 108 year-old company develops and manufactures beauty care products that include fragrances, toiletries, and colour cosmetics, and skin care, sun care, and personal care products. Its Jennifer Lopez perfume has raked in $1 billion in sales since being introduced in 2002.

The Coty brand portfolio is distributed in prestige and ultra-prestige stores and includes Calvin Klein, Davidoff, Jennifer Lopez, Sarah Jessica Parker, Adidas, Beyoncé Knowles, Celine Dion, David and Victoria Beckham, Esprit, Pierre Cardin, Playboy, Shania Twain, Stetson, and Tonino Lamborghini among others.