Coty Shareholders Seek to Raise Up to $1.2 Billion in IPO

Tuesday, 28 May 2013 09:02 AM

 

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Fragrance maker Coty Inc. said it expected its initial public offering of up to 65.7 million Class A shares to be priced at between $16.50 and $18.50 each, raising as much as $1.2 billion.

Coty, which sells perfumes under brands such as Calvin Klein, Davidoff and Chloe, said all the shares in the IPO would be offered by its three biggest stockholders — JAB Holdings BV and private equity firms Berkshire Partners LLC and Rhone Capital LLC.

Vienna-based JAB Holdings, owned by four siblings from the billionaire Reimann family, holds nearly 82 percent of Coty. It plans to sell 43.6 million shares, or 14 percent of its holdings, in the IPO.

Berkshire Partners and Rhone each own about 27.2 million shares, or 7.1 percent of the company, and they plan to sell 6.8 million shares each, trimming their respective stakes in the company to 6.6 percent.

Following the offering, all the three stockholders will have a combined 97.7 percent of voting power in the company as their stakes will be converted into class B shares, giving them 10 votes per share, compared with one vote per class A common share.

The company, founded in Paris in 1904 by Francois Coty, said it would not receive any proceeds from the share sale.

It reported a net profit of $230.3 million on revenue of $3.6 billion in the nine months to March 31.

The company, which failed in an attempt to buy Avon Products Inc. for $10.7 billion last year, filed to go public in June.

Coty's products run from luxury perfumes for fashion house Bottega Veneta to skin care products sold at Wal-Mart Stores Inc.

The company said it intends to list its common stock on the New York Stock Exchange under the symbol "COTY."

Coty competes with companies such as Estee Lauder Cos. Inc., L'Oreal SA and Elizabeth Arden Inc.

Estee Lauder shares are near their life-high, while Elizabeth Arden shares have soared about 32 percent in the last year.

Joint book-running managers for the offering are BofA Merrill Lynch, J.P. Morgan, Morgan Stanley, Barclays, Deutsche Bank Securities and Wells Fargo Securities.

Lead managers are Lazard Capital Markets, Piper Jaffray and RBC Capital Markets.

© 2014 Thomson/Reuters. All rights reserved.

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