Coty IPO set to raise a further $1 billion for the war chest

The company is offering up to 65.7 million Class A shares priced at between $16.50 and $18.50 on the New York Stock Exchange, offered by its biggest stockholders – JAB Holdings, and private equity firms Berkshire Partners and Rhone Capital.

JAB holdings is a consortium of four siblings from the Austria-based Reimann family. They currently have an estimated 82 percent share in the business, but the IPO will see that stake reduced by about 14 percent.

Coty eyeing next step to expand business​

Coty is currently ranked as the world’s second biggest fragrance player, holding brands such as Calvin Klein, Adidas and Playboy.

It is also a significant player in the skin care market, where it has a considerable exposure to the mass market, in contrast to its fragrance portfolio which is more focused on the prestige market.

Coty has been growing its revenues in double digit figures over the past couple of years, and in 2012 it posted a turnover of $4.6bn, and virtually doubled its profits to $535m, compared to the previous year.

Portfolio diversity and expansion into emerging markets​

But to continue with its expansion, the company has been looking to diversify further in the cosmetics and personal care area, and has been on a major acquisition trail for some time now.

Last year the company made a failed hostile bid to acquire Avon Products. Last May the company made a bid of $10.7bn for the business, which was flatly rejected by Avon executives who at the time said the business was not for sale.

Despite the deal falling through, Coty shareholders said that they would be happy to continue the search for other suitable acquisitions, with Berkshire Hathaway stating in an investor note that it would be willing to back a similar deal in the future.

It is expected that any future acquisition will serve to improve Coty’s exposure to emerging markets, specifically the Asia Pacific and Latin American markets.