Share prices in Coty have risen by 100% since the beginning of 2019, boosting the value of the company’s stock after it suffered a 67% decline during the course of 2018.
During the previous year investors had shied away from Coty, deeming it to be overstretched after it bought up a P&G portfolio that had also been under-performing.
JAB Holding brings renewed confidence
But under the watchful eye of JAB Holdings, the equity firm that took a majority stake in Coty back in April, the new management team is reported to have helped to instill a new sense of vigor into the business.
This has given decision makers at the business renewed confidence to recommence with its goals to continue to grow through mergers and acquisitions, an ambition that has been reinvigorated by its improved financial position thanks to its JAB backing.
And now, according to rumors that first circulated in Women’s Wear Daily and have been reconfirmed this week, those same executives are now in advanced talks to buy a significant stake in the runaway success brand, Kylie Cosmetics.
Can Coty afford another acquisition?
“Coty can’t really afford to be making sizable acquisitions at the moment, albeit we do think JAB would find a way to get creative for the right asset,” a note to clients from the investment wing of Barclays stated, alluding to the talks.
According to a WWD report dated today, Coty Chairman Peter Harf is now in advanced talks with Kylie Cosmetics to buy a controlling stake in the business that could amount to $600 million.
Kylie Cosmetics was founded by Kylie Jenner, of Keeping up With Kardashians fame, back in 2015. The business was initially called Kylie Lip Kits and then renamed Kylie Cosmetics in 2016 with the launch of a liquid liner and lip liner set.
Kylie Cosmetics keeps growing
The business has subsequently gone from strength to strength, and was estimated to be worth $900 million, according to a Forbes estimate in March of this year.
With personal assets worth around $100 million, that made Kylie Jenner the world’s youngest female billionaire at the age of just 21.
In May of 2019 the company debuted a skin care range, marketed as a dermis range and including face washes, scrubs, moisturizers and makeup removing wipes.