Kylie Jenner sold a $600M majority stake in Kylie Cosmetics and Kylie Skin to Coty Inc.
Under the terms of the agreement, Coty will acquire a 51 percent ownership in the partnership for $600M. The acquisition is expected to close in the third quarter of fiscal year 2020. Coty's family of brands includes Covergirl, Max Factor, Rimmel, Clairol, Sally Hansen, Adidas and Nautica.
Coty and Kylie will set and lead the strategic direction of the partnership, focusing on global expansion and entry into new beauty categories. Kylie and her team will continue to lead all creative efforts in terms of product and communications initiatives. Coty will have overall responsibility for the portfolio’s development, leveraging its global knowledge and capabilities in R&D, manufacturing, distribution, commercial and go-to-market expertise. In addition to its responsibilities within the partnership, Coty will act as a licensee for skincare, fragrances, and nail products.
“We are pleased to welcome Kylie into our organization and family. Combining Kylie’s creative vision and unparalleled consumer interest with Coty’s expertise and leadership in prestige beauty products is an exciting next step in our transformation and will leverage our core strengths around fragrances, cosmetics and skincare, allowing Kylie’s brands to reach their full potential,” says Pierre Laubies, Coty Chief Executive Officer, in a news release.
Kylie Jenner adds, “I’m excited to partner with Coty to continue to reach even more fans of Kylie Cosmetics and Kylie Skin around the world. I look forward to continuing the creativity and ingenuity for each collection that consumers have come to expect and engaging with my fans across social media. This partnership will allow me and my team to stay focused on the creation and development of each product while building the brand into an international beauty powerhouse.”
Coty expects the transaction will be accretive to the net revenue growth of its core fragrance, cosmetics and skincare portfolio by more than 1% p.a. over the next three years. The acquisition is expected to close in the third quarter of fiscal year 2020.
The transaction is expected to be neutral to Coty’s earnings per share (EPS) in year one, and accretive thereafter. The ROIC of the transaction is expected to exceed Coty’s cost of capital by Fiscal 2023. Kylie Cosmetics realized an estimated $177M net revenues for the trailing twelve months (TTM).