IMM launches tender offer for Korean cosmetics player

Leaf & Vine, a subsidiary of Vinus One – the consortium’s acquisition vehicle – will buy 4.31 million shares from Young-Pil Seo, Able C&C’s founder and CEO, for KRW43,636 per share, according to a filing. It is offering to acquire up to 10.17 million additional shares for KRW29,500 apiece, which would take its holding to 87.27%.

The pricing of the tender offer represents an 8.8% premium to the April 20 close of KRW27,100. The stock ended April 24 at KRW29,050, its highest level since early August. The total investment, across both transactions, would be KRW488.2 billion. IMM will participate through its third Korea-focused fund, which closed at approximately KRW1.25 trillion in October 2016.

Seo will retain a 3.77% interest in Able C&C after selling the majority of his interest to the consortium. Should the tender offer proceed as planned and other conditions be met, he will make a full exit. The IMM consortium has pledged to introduce various initiatives in pursuit of operational improvement and greater management efficiency.

Founded in 2000, Able C&C is best known for the Missha skincare brand. It also owns make-up, skin cream and perfume product lines under A’Pieu, Swisspure and Eau de Love, respectively. It generated revenue of KRW383.6 billion in 2016, up from KRW356.2 billion the previous year. Net income rose from KRW13 billion to KRW16.9 billion over the same period.

This is the second Korea cosmetics deal announced within a week, following Bain Capital Private Equity’s agreement to buy a controlling stake in Hugel for approximately KRW927.4 billion. The company produces botox among other skincare products.

Cosmetics is a popular target for private equity, not least because of the potential to leverage demand for high quality products overseas. Bain made its first foray into the space last July with the acquisition of Carver Korea in conjunction with Goldman Sachs. A few days later, L Capital Asia – now known as L Catterton Asia – took a minority interest in Clio Cosmetics.

IMM has previously tapped into the broader “Korea wave” effect – shorthand for the international popularity of Korean cultural assets, from music to TV dramas to beauty products – with Hollys Coffee. When expanding into China, the company positioned itself as a cultural outpost by sponsoring music events, featuring images of pop stars in its menus, and playing music clips on screens in its restaurants.

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• Topics
• North Asia
• Buyouts
• Consumer
• South Korea
• IMM Investment