Elizabeth Arden, Inc. (RDEN), Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA), Estee Lauder Companies Inc (EL): Will This IPO Be the Fairest of All?

Coty, the global beauty and fragrance company, should IPO in the next few weeks. Beauty names like The Est, Elizabeth Arden, Inc. (NASDAQ:RDEN) and Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) have been on fire the last couple years so interest is high in Coty as another chance for upside in this sector.

The debut of the season

According to Women’s Wear Daily this IPO is reputedly worth $1.2 billion, almost double what was reported last September. Three investors backing the company will still hold 97% of voting shares and 81% of the common equity. Those investors are Berkshire Partners (7.1% stake), Rhone Capital, and Joh. A Benckiser Holdings BV.

Initial pricing is in the $16.50-$18.50 range but don’t be surprised if it prices higher.The market expects 65.7 million class A shares to come to market. Coty is the name behind the wildly successful celebrity and designer fragrances Lady Gaga Fame, Daisy by Marc Jacobs, Sarah Jessica Parker Lovely, and Calvin Klein CK.  It also owns popular beauty brands OPI nail polish, Rimmel, Sally Hansen, and philosophy.

Coty is one of the oldest and most established beauty companies, founded in Paris in 1904 by Francois Coty.  It reported nine-month revenue of $3.6 billion as of Mar. 31. The year ago period it reported $3 billion.

Last year in May it tried to buy Avon Products, Inc. (NYSE:AVP) but Avon refused to be bought at the last minute letting a deadline lapse. Avon’s share price rose 41.63% since their takeover attempt. Avon Products, Inc. (NYSE:AVP) would also have been a nice “get” for Coty for its emerging markets exposure and distribution network.

Coty was supposed to debut last September on the Nasdaq and was expected then to help redeem the exchange’s reputation after the Facebook Inc. (NASDAQ:FB) debacle.  Due to the appointment of a new CEO Michele Scannavini, Coty decided to postpone the IPO. The company filed May 13 to trade on the NYSE and the ticker will be COTY.

According to Reuters the lead book managers are Lazard Capital Markets, RBC Capital Markets, and Piper Jaffray.  According to an amended SEC filing Wells Fargo securities, Deutsche Bank, Credit Agricole, BNP Paribas, and more are also involved. The Wall Street Journal and Bloomberg report it is being led by Bank of America Merrill Lynch, Morgan Stanley, and J.P. Morgan. When I wrote about it last summer the latter three were expected to lead the offering. No matter who or how many run it this will be a widely-hyped debut.