Henkel Acquires DevaCurl: Preface To Coty Professional Hair-Care Buy?
Analysts believe Henkel is a top contender to acquire Coty’s professional hair-care business, which ranks second in the world after L’Oreal’s, with Henkel’s a distant third. According to Kline’s Carrie Mellage, the DevaCurl deal shows the German firm’s enduring appetite for M&A following a series of similarly small, US-focused purchases in recent years that could be leading to something much larger.
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Leadership assured analysts on 6 November that Coty's Professional Beauty and Brazilian businesses are strong performers of high interest to potential acquirers, unlike Younique. Coty recently sold its majority stake in the social selling company back to its founders at a price that raised eyebrows.
The world’s third-largest beauty company is changing direction following an acquisition tear in recent years, now exploring strategic options for its Professional hair care/salon and Brazilian businesses to reduce debt and sharpen its focus on Luxury and Consumer fragrance, makeup and skin care. The 21 October announcement has lifted Coty’s stock roughly 18%, though analyst takes are mixed.
Henkel's latest pro hair-care acquisition, Shiseido's North American-focused Zotos business, boosts its regional market share ahead of former leader Coty. Meanwhile, Revlon reports "disappointing" third-quarter results, and market researcher NPD trumpets the return to growth of "age specialist" skin-care products.