US group Coty continued its spending spree on Monday, this time snapping up London-based Ghd, which makes hair straighteners and curlers, for $ 510m.
The acquisition comes on top of at least $ 14bn that the US cosmetics and fragrances group has spent since June last year, in deals that have put it on a trajectory to challenge France’s L’Oréal in the global beauty industry.
Coty, whose brands include Rimmel, Calvin Klein and Davidoff, last year bought Procter & Gamble’s beauty assets in a $ 12.5bn transaction. It spent another $ 1bn on Hypermarcas, the Brazilian beauty business, as it sought to bolster its overseas presence.
Ghd — Good Hair Day — is being bought from Lion Capital, the private equity group, with a mixture of cash and debt, Coty said. It sells hair dryers and other electrical hair tools, including straighteners and curling tongs.
Camillo Pane, chief executive of Coty, said the acquisition would “strengthen our professional haircare business through the addition of innovative market-leading brands”.
Mr Pane, who became chief executive this month after the completion of the P&G deal, joined Coty last year from Reckitt Benckiser, the Dettol-to-Durex consumer goods group, which used to be headed by Bart Becht, now chairman of Coty.
Ghd generated £178m in revenues last year and has operations in Australia, the US, Germany, France, Spain and Italy. Its chief executive Anthony Davey, will continue to run the business as a standalone operation within Coty’s professional beauty division.
The sale gives Lion Capital an exit from Ghd, which it bought three years ago from rival Montagu Private Equity for £300m. Lyndon Lea, partner at Lion Capital, said Ghd had increased its sales by 30 per cent over the past three years.
Coty’s acquisition spree has more than doubled its annual revenues to $ 9bn, making it the world’s biggest seller of fragrances and the third-largest company in colour cosmetics.
The dealmaking has been regarded favourably by investors. Coty’s shares have risen 34 per cent since 2013, when it raised $ 1bn in its initial public offering on the New York Stock Exchange. It now has a market value of $ 17bn.
Joh A Benckiser, the holding company for Germany’s billionaire Reimann family, retains a controlling stake.
L’Oréal, the world’s biggest cosmetics group, is almost three times bigger in terms of sales with annual revenues of €25bn and a market value of €93bn.