Coty Acquires British Hair Straightener Company GHD
American group Coty has reached an agreement to buy hair styling appliances maker Good Hair Day – better known as GHD – for $510 million.
The British company becomes the latest to be acquired by Coty, which has been on a spending spree of sort since last year. The American cosmetics and fragrances group has spent at least $14 billion on acquisitions since June last year, as reported by the Financial Times.
Coty, which owns some of the best-known global brands such as Calvin Klein, Rimmel and Davidoff, became the third-largest beauty in the world with acquisition of the hair care, perfume and makeup businesses of Procter & Gamble in a $12.5 billion deal, which was concluded weeks ago.
The takeover of GHD by the U.S. beauty company will see the UK firm join popular brands such as Wella and Clairol.
Founded in 2001, GHD deals in electrical hair treatment tools, including hairdryers, curling thongs and ceramic straightening irons. Its products have grown to become quite popular with celebrities and stylists. The hair appliances maker does business in the UK, US, Australia and some countries in Europe, with its headquarters in London.
GHD, which was started by three entrepreneurs in Bradford with £15,000, was sold for £300 million three years ago to Lion Capital. The hair appliance maker was bought by Coty from the private equity company.
“We are pleased to be selling GHD to Coty, a global leader in the beauty category, where it can take its rightful place among Coty’s unique family of beauty brands” said Lyndon Lea, partner at Lion Capital.
Lea disclosed that sales of the hair straightening iron maker increased by 30 percent since Lion Capital acquired it from rival equity firm Montagu Private Equity three years ago.
Coty bought the British firm with a combination of cash and debt. The American beauty company’s chief executive, Camillo Pane, said the GHD takeover would bolster its “professional business through the addition of innovative market-leading brands.”
GHD reported £178 million in revenues last year. It is believed to have raked in about £33 million in pre-tax profits.
The raft of acquisitions Coty has made since last year has increased its annual revenues by more than double to $9 billion, according to the Financial Times. This will make the company the biggest fragrances seller in the world and the second-largest maker of color cosmetics.
Coty’s share value has increased by 34 percent since 2013 when it raised $1 billion in its IPO on the New York Stock Exchange. The company’s market value currently stands at $17 billion. Controlling stake in the company is held by JAB Holding, which is majority-owned by the German billionaire family Reimann.
GHD Chief Executive Anthony Davey will continue in his role by running the company as a standalone business within the professional beauty division of Coty.
The U.S. beauty company still remains far behind the world No. 1 cosmetics group L’Oreal. The French group boasts about €25 billion in annual revenues and €93 billion in market value.
Coty shares, which have slumped by roughly 18 percent over the past one year, inched up 0.5 percent on Monday.