Lion Capital sells GHD to Coty for £420m

Kenny Wastell
18 October 2016

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Lion Capital has sold hairstyling appliances company GHD to listed US trade buyer Coty for ТЃ420m.

Under Lion's tenure, the business expanded its remit from a focus on the professional salon market to a more consumer- and e-commerce-focused approach. The company also increased its international sales by 30%.

The deal will be structured as a combination of cash and debt, with GHD to be incorporated into Coty's professional beauty division.

Following the deal, existing CEO Anthony Davey will continue in his existing role alongside other members of the senior management team.

The sale is the latest in a wave of UK private-equity-backed businesses being snapped up by US buyers. Most recently, Alcuin Capital Partners sold its stake in doughnut business Krispy Kreme UK to brand owner Krispy Kreme Group. Other high profile sales include CVC Capital Partners' $8bn sale of Formula One Group to Liberty Media and Terra Firma's £921m sale of Odeon & UCI Cinemas Group to listed trade buyer AMC Theatres.

Previous funding
The deal marks a break from the private equity model for GHD after 10 years and three consecutive private equity owners. LDC originally acquired the company, at the time known as Jemella Group, in July 2006. The following year Montagu Private Equity acquired the company in a £160m secondary buyout.

Lion then acquired GHD from Montagu for a figure believed to be £300m in February 2013. The deal was supported by a debt package provided by Lloyds.

Company
Headquartered in London and founded in 2001, GHD produces hairstyling appliances, including straighteners, hair dryers and curlers. The business generated a turnover of £178m in its latest financial year, up from £150m at the time of Lion's original acquisition. It has operations across the UK, Australia, the US, Germany, France, Spain and Italy.

People
Lion Capital – Lyndon Lea (partner).
Coty – Camillo Pane (CEO).

Advisers
Vendor – Rothschild (corporate finance); Proskauer Rose (legal).
Acquirer – Skadden Arps Slate Meagher & Flom (legal).