As part of an ongoing share repurchase strategy, Coty has agreed to purchase 27,892,818 shares of Class B Common Stock owned by investment funds affiliated with Berkshire Partners (Berkshire) and Rhone (Rhone), representing all the shares of Class B Common Stock they will own on the purchase date. Coty will purchase the shares at a price of $16.7779 based upon the previous five day volume weighted average price. The total consideration for the 28 million shares will be $468 million. Pursuant to this transaction, Brad Bloom from Berkshire and Steve Langman from Rhone will resign their positions on the Board of Directors, and the Coty Board will comprise eight members.
"We believe repurchasing our shares is a prudent use of our cash and are pleased to extend Coty's record of returning value to shareholders through continued share repurchases," stated Patrice de Talhouet, Coty CFO. "This repurchase of shares is in addition to our recently announced $200 million incremental share repurchase program authorized by our Board, and demonstrates our ongoing confidence in Coty's strategy to generate long-term profitable growth and strong cash flow."
"On behalf of our board of directors and executive committee members, I would like to thank Brad and Steve for their support, dedication and service to our organization," stated Michele Scannavini, Coty CEO. "They served with distinction and provided invaluable guidance to management during a pivotal time in our company's history."
"Over the past three and a half years, we have been honored to partner with Coty on its path to becoming a leader in the global beauty industry as it built a growing presence across new product categories and emerging markets around the globe," said Steve Langman, managing director at Rhone. "While we now exit our shareholding as the company has completed its transition from the private to public capital markets commensurate with our original investment horizon, we continue to believe in the strength and creativity of its management team and growth potential of its brands. We thank Coty and its board for this extraordinary opportunity."
"It was a privilege to partner with Coty, one of the world's leading beauty companies, during such an exciting chapter for the company," said Brad Bloom, Managing Director at Berkshire Partners. "We look forward to watching Coty's continued success."