Download FORM 8-K - corporate

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 21, 2016
Coty Inc.
(Exact Name of Registrant as Specified in its Charter)
DE
(State or other Jurisdiction
of Incorporation)
001-35964
13-3823358
(Commission File Number)
(I.R.S. Employer
Identification No.)
350 Fifth Avenue
New York, NY
(Address of Principal Executive Offices)
10118
(Zip Code)
Registrant’s telephone number, including area code: (212) 389-7300
(Former name or former address, if changed from last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets.
On November 21, 2016, Coty Inc. (the “Company”) completed its previously announced acquisition of ghd
(“ghd”), a premium brand in high-end hair styling and appliances for approximately ₤430 million (approximately $530
million) (the “Transaction”). As previously disclosed, the purchase price reflects certain adjustments, primarily driven by
higher net working capital balances and certain transaction and other costs.
As previously announced, the Company entered into a Sale and Purchase Agreement for the purchase of ghd,
dated as of October 17, 2016 (the “SPA”), with the management sellers named therein (the “Management Sellers”), Gloria
Coinvest 1 L.P. (“Coinvest 1”), Lion Capital Fund III L.P. (“Lion”), Lion Capital Fund III SBS L.P. (“Lion SBS”), Lion
Capital Fund III (USD) L.P. (“Lion Capital”), Lion Capital Fund III SBS (USD) L.P. (“Lion Capital SBS”, and along with
Lion, Lion SBS and Lion Capital, the “Lion Sellers”), Ghd Nominees Limited (“GHD”), and certain other former
employee sellers named in the SPA (the “Other Sellers” and, together with the Management Sellers and Lion Sellers, the
“Sellers”). The Transaction closed on November 21, 2016. Following the closing of the Transaction, the Company owns
all of the issued shares in Lion/Gloria TopCo Limited, a private limited company organized under the laws of Jersey.
The summary set forth above does not purport to be complete and is qualified in its entirety by reference to the
full text of the SPA, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on
October 17, 2016 and which is incorporated herein by reference.
Item 8.01 Other Events.
On November 21, 2016, the Company issued a press release announcing the closing of the Transaction, a copy of
which is attached as Exhibit 99.1 hereto. Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section,
nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as expressly set forth by specific reference in such a filing.
Forward-Looking Statements
Certain statements in this communication are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements reflect the Company’s current views with respect to,
among other things, the Company’s future operations and financial performance, expected growth, the Company’s ability
to support its planned business operations on a near- and long-term basis, the acquisition of ghd and synergies or growth
from the acquisition of ghd. These statements are based on certain assumptions and estimates that the Company considers
reasonable. These forward-looking statements are generally identified by words or phrases, such as “anticipate”,
“estimate”, “plan”, “project”, “expect”, “believe”, “intend”, “foresee”, “forecast”, “will”, “may”, “should”, “outlook”,
“continue”, “target”, “aim” and similar words or phrases.
Reported results should not be considered an indication of future performance, and actual results may differ materially
from the results predicted due to risks and uncertainties including:
•
the Company’s ability to achieve its global business strategy and compete effectively in the beauty industry,
including successfully leveraging growth opportunities and addressing challenges inhibiting growth in its brand
portfolio;
•
the integration related to the acquisition (the “Transactions”) of The Procter & Gamble Company’s (“P&G”)
global fine fragrances, salon professional, cosmetics and retail hair color businesses, along with select hair styling
brands (the “P&G Beauty Brands”) with the Company’s business, operations and culture and the ability to realize
synergies and other potential benefits of the Transactions within the time frames currently contemplated,
including planned organizational changes and their effects, diversion of management attention from existing core
businesses and the impact of recent changes in management teams in the Company’s headquarters, regions and
countries;
•
the Company’s ability to anticipate, gauge and respond to market trends and consumer preferences, which may
change rapidly, and the market acceptance of new products;
•
the Company’s ability to identify suitable acquisition targets and managerial, integration, operational, regulatory
and financial risks associated with those acquisitions, including its acquisitions of Bourjois, Beamly, Hypermarcas
S.A., the P&G Beauty Brands and ghd, including risks related to litigation or investigations involving
governmental authorities relating to any acquisition and the ability of the Company to achieve the benefits
contemplated by any proposed transaction within the expected time frame;
•
risks associated with acquisitions or other strategic transactions, including acquired liabilities and restrictions,
retaining customers from businesses acquired, achieving any expected results or synergies from acquired
businesses, complying with new regulatory frameworks, difficulties in integrating acquired businesses or
implementing strategic transactions generally and risks associated with international acquisition transactions,
including in countries where the Company does not currently have a material presence;
•
risks related to the Company’s international operations, including reputational, regulatory, economic and foreign
political risks, such as the political instability in Eastern Europe and the Middle East, the debt crisis and the
economic environment in Europe, including any potential impact of Brexit, and fluctuations in currency exchange
rates;
•
dependence on certain licenses, entities performing outsourced functions and third-party suppliers;
•
the Company, including ghd, its brand partners’ and licensors’ ability to obtain, maintain and protect the
intellectual property rights used in its products and their abilities to protect their respective reputations;
•
administrative, development and other difficulties in meeting the expected timing of market expansions, product
launches and marketing efforts;
•
global political and/or economic uncertainties or disruptions, including a general economic downturn, a sudden
disruption in business conditions affecting consumer purchases of the Company’s products and volatility in the
financial markets;
•
the Company’s ability to manage seasonal variability;
•
consolidation among retailers, shifts in consumers’ preferred distribution channels, and other changes in the retail
environment in which the Company sells its products;
•
disruptions in
operations;
•
increasing dependency on information technology and the Company’s ability to protect against service
interruptions, data corruption, cyber-based attacks or network security breaches, costs and timing of
implementation and effectiveness of any upgrades to its information technology systems and failure by the
Company to comply with any privacy or data security laws or to protect against theft of customer, employee and
corporate sensitive information;
•
changes in laws, regulations and policies that affect the Company’s business or products;
•
the Company’s ability to attract and retain key personnel;
•
use of estimates and assumptions in preparing the financial statements, including with regard to revenue
recognition, the market value of inventory and the fair value of acquired assets and liabilities associated with
acquisitions;
•
market acceptance of new product
introductions;
•
the illegal distribution and sale by third parties of counterfeit versions of the Company’s products; and
•
other factors described elsewhere in this document and from time to time in documents that the Company files
with the Securities and Exchange Commission.
More information about potential risks and uncertainties that could affect the Company’s business and financial results is
included under the heading “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2016 and other periodic reports the Company has filed and may file with the Securities and Exchange
Commission from time to time.
All forward-looking statements made in this communication are qualified by these cautionary statements. These
forward-looking statements are made only as of the date of this communication, and the Company does not undertake any
obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to
reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results
over time or otherwise.
Comparisons of results for current and any prior periods are not intended to express any future trends or indications of
future performance unless expressed as such, and should only be viewed as historical data.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
Exhibit No.
2.1
99.1
Description
Sale and Purchase Agreement, dated as of October 17, 2016, by and among Coty Inc., Gloria Coinvest 1
L.P., Lion Capital Fund III L.P., Lion Capital Fund III SBS L.P., Lion Capital Fund III (USD) L.P., Lion
Capital Fund III SBS (USD) L.P., Ghd Nominees Limited, the management sellers named therein, and the
other individual sellers named therein (incorporated by reference to Exhibit 2.1 of the Company’s Current
Report on Form 8-K filed on October 17, 2016).
Press Release of the Company, dated November 21, 2016.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly authorized.
Coty Inc.
(Registrant)
Date: November 21, 2016
By: /s/ Greerson G. McMullen
Greerson G. McMullen
Chief Legal Officer, General Counsel and
Secretary
COTY INC.
EXHIBIT INDEX
Exhibit No.
2.1
99.1
Description
Sale and Purchase Agreement, dated as of October 17, 2016, by and among Coty Inc., Gloria Coinvest
1 L.P., Lion Capital Fund III L.P., Lion Capital Fund III SBS L.P., Lion Capital Fund III (USD) L.P.,
Lion Capital Fund III SBS (USD) L.P., Ghd Nominees Limited, the management sellers named therein,
and the other individual sellers named therein (incorporated by reference to Exhibit 2.1 of the
Company’s Current Report on Form 8-K filed on October 17, 2016).
Press Release of the Company, dated November 21, 2016.
COTY COMPLETES ACQUISITION OF GHD (“GOOD HAIR DAY”)
THE WORLD’S PREMIUM HAIR STRAIGHTENERS & APPLIANCES COMPANY
New York - November 21, 2016 - Coty Inc. (NYSE: COTY) announced today that it has completed the acquisition of
ghd, a global premium brand in high-end hair styling appliances, further strengthening Coty’s worldwide leading position
in professional hair care. The acquisition is expected to be immediately accretive to Coty’s earnings.
Camillo Pane, Coty Chief Executive Officer, said, “We are excited to welcome the ghd company to Coty. The addition of
ghd, with their state-of-the-art hair appliances further strengthens our Coty Professional Beauty division, providing us
with a strong foothold in an adjacent, complementary category. We look forward to continuing to grow and nurture ghd
internationally as Coty strives to become a global industry leader by being a clear challenger in beauty.”
ghd will become part of the Coty Professional Beauty division, where it will be managed as a standalone business led by
its current CEO Anthony Davey and management team. Anthony Davey will report to Sylvie Moreau, President of Coty
Professional Beauty. The company has international operations in Europe, Australia, South Africa, and the USA. ghd
products are sold through salons, in premium retail and through e-commerce. It is the number one stylist-recommended
and number one consumer-preferred styler brand in all of its key markets.
About Coty Inc.
Coty is one of the world’s largest beauty companies with approximately $9 billion in revenue, with a purpose to celebrate
and liberate the diversity of consumers’ beauty. Its strong entrepreneurial heritage has created an iconic portfolio of
leading beauty brands. Coty is the global leader in fragrance, a strong number two in professional salon hair color &
styling, and number three in color cosmetics. Coty operates three divisions - Coty Consumer Beauty, which is focused on
color cosmetics, retail hair coloring and styling products, body care and mass fragrances sold primarily in the mass retail
channels with brands such as COVERGIRL, Max Factor and Rimmel; Coty Luxury, which is focused on prestige
fragrances and skincare with brands such as Calvin Klein, Marc Jacobs, Hugo Boss, Gucci and philosophy; and Coty
Professional Beauty, which is focused on servicing salon owners and professionals in both hair and nail, with brands such
as Wella Professionals, Sebastian Professional and OPI. Coty has approximately 20,000 colleagues globally and its
products are sold in over 130 countries. Coty and its brands are committed to a range of social causes as well as seeking to
minimize its impact on the environment.
For additional information about Coty Inc., please visit www.coty.com.
About ghd
Good Hair Day, better known as ghd, is a global premium, electrical styling brand that is in the business of transforming
the lives of women everywhere so that they can look and feel beautiful every day. Game-changing innovation,
cutting-edge technology, superior performance and award-winning design are all hallmarks of the brand. Founded in
2001 by three British hairdressers, ghd straighteners were originally developed exclusively for professional stylists and
quickly developed a cult following among professionals, consumers and celebrities alike. Based in the UK, the company
has international operations in Europe, Australia, South Africa, and the USA. Today, ghd is a multi-category,
multi-channel brand with a range of stylers, hairdryers and curling tongs, and is the number one stylist-recommended and
number one consumer-preferred brand in all of its key markets. For more information, please visit www.ghdhair.com .
Forward-Looking Statements
Certain statements in this communication are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements reflect Coty Inc.’s (the “Company”) current views with
respect to, among other things, the Company’s future operations and financial performance, expected growth, the
Company’s ability to support its planned business operations on a near- and long-term basis, the acquisition of ghd and
synergies or growth from the acquisition of ghd. These statements are based on certain assumptions and estimates that the
Company considers reasonable. These forward-looking statements are generally identified by words or phrases, such as
“anticipate”, “estimate”, “plan”, “project”, “expect”, “believe”, “intend”, “foresee”, “forecast”, “will”, “may”, “should”,
“outlook”, “continue”, “target”, “aim” and similar words or phrases.
Reported results should not be considered an indication of future performance, and actual results may differ materially
from the results predicted due to risks and uncertainties including:
• the Company’s ability to achieve its global business strategy and compete effectively in the beauty industry,
including successfully leveraging growth opportunities and addressing challenges inhibiting growth in its brand
portfolio;
•
the integration related to the acquisition (the “Transactions”) of The Procter & Gamble Company’s (“P&G”)
global fine fragrances, salon professional, cosmetics and retail hair color businesses, along with select hair styling
brands (the “P&G Beauty Brands”) with the Company’s business, operations and culture and the ability to realize
synergies and other potential benefits of the Transactions within the time frames currently contemplated,
including planned organizational changes and their effects, diversion of management attention from existing core
businesses and the impact of recent changes in management teams in the Company’s headquarters, regions and
countries;
•
the Company’s ability to anticipate, gauge and respond to market trends and consumer preferences, which may
change rapidly, and the market acceptance of new products;
•
the Company’s ability to identify suitable acquisition targets and managerial, integration, operational, regulatory
and financial risks associated with those acquisitions, including its acquisitions of Bourjois, Beamly,
Hypermarcas S.A., the P&G Beauty Brands and ghd, including risks related to litigation or investigations
involving governmental authorities relating to any acquisition and the ability of the Company to achieve the
benefits contemplated by any proposed transaction within the expected time frame;
•
risks associated with acquisitions or other strategic transactions, including acquired liabilities and restrictions,
retaining customers from businesses acquired, achieving any expected results or synergies from acquired
businesses, complying with new regulatory frameworks, difficulties in integrating acquired businesses or
implementing strategic transactions generally and risks associated with international acquisition transactions,
including in countries where the Company does not currently have a material presence;
•
risks related to the Company’s international operations, including reputational, regulatory, economic and foreign
political risks, such as the political instability in Eastern Europe and the Middle East, the debt crisis and the
economic environment in Europe, including any potential impact of Brexit, and fluctuations in currency exchange
rates;
•
dependence on certain licenses, entities performing outsourced functions and third-party suppliers;
•
the Company, including ghd, its brand partners' and licensors' ability to obtain, maintain and protect the
intellectual property rights used in its products and their abilities to protect their respective reputations;
•
administrative, development and other difficulties in meeting the expected timing of market expansions, product
launches and marketing efforts;
•
global political and/or economic uncertainties or disruptions, including a general economic downturn, a sudden
disruption in business conditions affecting consumer purchases of the Company’s products and volatility in the
financial markets;
•
the Company’s ability to manage seasonal variability;
•
consolidation among retailers, shifts in consumers’ preferred distribution channels, and other changes in the retail
environment in which the Company sells its products;
•
disruptions in
operations;
•
increasing dependency on information technology and the Company's ability to protect against service
interruptions, data corruption, cyber-based attacks or network security breaches, costs and timing of
•
implementation and effectiveness of any upgrades to its information technology systems and failure by the
Company to comply with any privacy or data security laws or to protect against theft of customer, employee and
corporate sensitive information;
changes in laws, regulations and policies that affect the Company’s business or products;
•
the Company’s ability to attract and retain key personnel;
•
use of estimates and assumptions in preparing the financial statements, including with regard to revenue
recognition, the market value of inventory and the fair value of acquired assets and liabilities associated with
acquisitions;
•
market acceptance of new product
introductions;
•
the illegal distribution and sale by third parties of counterfeit versions of the Company’s products; and
•
other factors described elsewhere in this document and from time to time in documents that the Company files
with the Securities and Exchange Commission.
More information about potential risks and uncertainties that could affect the Company’s business and financial results is
included under the heading “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016
and other periodic reports the Company has filed and may file with the Securities and Exchange Commission from time to
time.
All forward-looking statements made in this communication are qualified by these cautionary statements. These
forward-looking statements are made only as of the date of this communication, and the Company does not undertake any
obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to
reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results
over time or otherwise.
Comparisons of results for current and any prior periods are not intended to express any future trends or indications of
future performance unless expressed as such, and should only be viewed as historical data.
Coty Contacts:
Investor Relations
Kevin Monaco, +1 212 389 6815
Or
Media
Jennifer Friedman, +1 212 389 7175