MSPEA leads acquisition of Greek skincare business
Morgan Stanley Private Equity Asia (MSPEA) and Profex, a Chinese skincare company, have agreed to pay EUR48.3 million ($57.7 million) for a majority interest in Korres, a Greek specialist cosmetics manufacturer.
Nissos, an acquisition vehicle set up by MSPEA and Profex, will buy a 6.6% stake held by Giorgos Korres, the company’s founder, and 45.7% from other shareholders, according to a filing. MSPEA and Profex will own 56% and 14%, respectively, of Nissos. Giorgos Korres and members of his family will exchange their remaining 30% interest in the company for an equal share in the acquisition vehicle.
Once these transactions have been completed, Nissos will hold more than 82% of Korres and launch a mandatory takeover offer for the entire company. The offer price will be EUR5.08 per share, valuing the entire business at approximately $69 million. Korres’ stock closed at EUR4.91 on December 27, the day the deal was announced.
Established in 1996, the company’s first product was an aromatic herbal syrup with honey and aniseed, based on a recipe devised by Giorgos Korres’ grandfather. This was followed by Wild Rose, a skin cream that became a global best-seller. Korres develops products based on natural ingredients that project the benefits of Greek flora through cooperation with local farmers.
The company is now has a portfolio of 400 herbal products that are distributed to 30 countries in Europe, the Middle East, Asia, and North America. Sales came to EUR54.6 million in 2016, up 0.1% year-on-year, while adjusted EBITDA was unchanged at EUR8.2 million and the net loss widened from EUR1.4 million to EUR2.3 million.
MSPEA and Profex are expected to invest EUR10 million to support the future expansion of Korres. Meanwhile, the company has entered into an exclusive license and supply agreement with Profex covering mainland China, Hong Kong, and Macau.
MSPEA is currently investing its fourth pan-regional fund, which closed at $1.7 billion in 2014. Recent activity includes the sale of Chinese convenience store chain Hi-24 to several strategic investors and a proposed $172 million privatization of NASDAQ-listed power steering components supplier China Automotive Systems.
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