Coty goes public to raise $700m for its treasure chest

By Simon Pitman

- Last updated on GMT

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Fragrance player Coty has confirmed that it plans to raise approximately $700 million from an initial public offering, putting it in a stronger position for future acquisitions.

The France-based business, which has grown enormously in recent years on the back of carefully chosen licensing deals with high profile celebrities and designers, confirmed that the stocks would be listed under the ‘COTY’ name.

The decision to go ahead with the IPO follows its withdrawal from the bidding process to acquire direct sales cosmetic giant and rival Avon.

After pulling out of the Avon bidding...

Coty had originally made a bid back in March to acquire Avon for $10bn, before this was upped in April to $10.7bn. However, this offer was then withdrawn claiming that Avon had taken too long to respond to it.

Following the withdrawal Coty confirmed that it was planning an IPO with the aim of putting it firmly back on the acquisition trail, a process that has taken the company a month to bring to fruition.

It has also been growing its fragrance licensing business, raking in big stars such as Beyonce Knowles, Halle Berry, David Beckham and Lady Gaga, as well as designers labels such as Vivienne Westwood and Pierre Cardin.

Diversifying into color cosmetics and skin care

But building on the licensing side of the business it has also been diversifying by growing its skin care and color cosmetics portfolio, buying up the Philosophy skin care brand from Carlyle and nail care providing OPI, both in 2010.

The company has not confirmed whether the stock will be floated on Nasdaq or the New York Stock Exchange, while details about the price of individual shares were also held back when the regulatory filing was made public today.

Coty is a France-based company, but is majority owned by the German Benckiser family, a multi billion dollar investment business that also owns the British-based Reckitt-Benckiser personal and home care business, an empire that gives it significant financial backing and impetus, as well as some synergies.

In the IPO filing Coty confirmed forecasts of a $4.5 billion in revenue in fiscal 2012. In 2011 it recorded a net profit of $61.7 million against sales revenue of $4.09 billion.

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