Confirming a report in today¹s WWD, Coty Inc. has inked a deal to acquire DLI Holding Corp., which is known in the beauty industry as Del Laboratories, the maker of Sally Hansen nail care products, said a Coty spokeswoman.

Coty would not comment on the terms of the deal, but industry sources estimate the beauty firm paid roughly $800 million to Kelso & Co., the New York private equity firm that bought Del Labs for $465 million in 2004.

“We view the acquisition of DLI Holding Corp. as a natural extension of our strategy to offer a unique portfolio of brands that produce some of the strongest consumer franchises around the world,” stated Bernd Beetz, Coty’s chief executive officer. “Del’s established, well-regarded portfolio of quality products mesh well with our core offerings, and their strong presence in North America complements Coty Beauty and Coty’s international strength,” he added, referring to the Coty¹s mass market division, Coty Beauty.

The acquisition is intended to push Coty – a $3.3 billion company with a fragrance-heavy brand portfolio – closer to its previously announced goal of becoming a $5 billion beauty firm by 2010. The deal significantly pads Coty’s mass market cosmetics business, which currently includes Rimmel, by adding Sally Hansen – the  market leader in nail care – and NYC New York Color. It also adds to the fold the beauty tools brand La Cross and over-the-counter pharmaceuticals, including Orajel and Dermarest.

Industry sources expect Coty will move swiftly to consolidate Del Labs’ Uniondale, N.Y., headquarters into the fragrance firm’s Manhattan offices.

Industry watchers have long suspected that  Beetz aims to take the firm public, but said he would first need to round out its brand portfolio. The acquisition of Del Labs’ beauty brands, particularly Sally Hansen, could mark a decisive move to diversify Coty’s business to more profitable beauty categories.

Coty is 100 percent owned by the Ludwigshafen, Germany-based Joh. A. Benckiser GmbH, a private holding company that also owns 15 percent of the London-based consumer products firm Reckitt Benckiser. Peter Harf, the ceo of Joh. A. Benckiser, serves as Coty¹s chairman.