KKR to take majority stake in Laser Clinics Australia

Following The Growth Fund’s investment in 2014, LCA has accelerated its rollout and now has 80 clinics. The GP will retain a minority stake in the business as KKR drives further expansion of the company’s franchisee network, the introduction of new product and service offerings, and the exploration of growth opportunities overseas.

The deal size was first reported by Australian media and has since been confirmed to AVCJ by sources familiar with the situation. KKR overcame competition from an assortment of private equity and strategic players.

LCA started in 2007 as a small business run by Babak Moini and Alistair Champion. At the time, laser hair removal and cosmetic injectables were only offered at a high price point in low-traffic medical center locations. Moini and Champion saw the potential of taking these procedures to the mass market at affordable prices.

Scale came through a 50-50 ownership split between the parent company and its clinic operators, which continues today. By 2014, the business had grown to 25 clinics across New South Wales and Queensland. The Growth Fund helped LCA build a nationwide footprint. Three million treatments were performed last year by a team of around 135 doctors and nurses.

“We have been impressed by the quality of LCA’s franchise model and commitment to the highest clinic standards and client experience. The non-invasive aesthetic space is seeing significant growth and we look forward to assisting the company to expand its clinic network to support the growing demand for services,” said Gareth Woodbridge, a principal at KKR, in a statement.

This is the private equity firm’s second announced deal in Australia since closing its third pan-Asian fund in June at $9.3 billion. The first was Dixon Hospitality, which operates a portfolio of food and beverage outlets in major cities across the country. Separately, KKR Credit Advisors won board approval for the purchase of mortgage lender and distressed debt servicer Pepper Group in August.

KKR previously found success in Australia’s private healthcare space with GenesisCare, which operates a chain of cancer and cardiac clinics. Having bought a 45% stake in the business in 2012, the GP supported further expansion domestically and overseas before exiting last year as China Resources Group and Macquarie Capital took a majority stake at an enterprise valuation of A$1.7 billion.

As with LCA, KKR’s investment in GenesisCare represented an exit for a domestic private equity firm, in that instance Advent Partners. The Growth Fund, which has a similar lower middle market remit, raised two vehicles under the Archer Capital banner but now operates independently. The firm closed Fund III last year at A$450 million.

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• Topics
• Australasia
• Healthcare
• Buyouts
• Trade sale
• Australia
• KKR