Advent set for partial exit in Silk Laser's Australia IPO

The company plans to sell 24.2 million shares for A$3.45 apiece, according to a filing. This translates into an enterprise value of A$156.6 million and a forward EBITDA multiple of 11.2x. The offer includes 18.4 million existing shares, including 14.6 million held by Advent, which means the private equity firm will take A$50.2 million off the table. Its stake will fall from 64.3% to 28.2%.

Advent acquired Silk in January 2018 through its seventh fund – or its second following a succession planning initiative and a rebrand – which closed at A$300 million later that year. The size of the investment was not disclosed.

Silk was founded in 2009 by Martin Perelman who remains the CEO and a minority shareholder in the business. Advent’s investment was intended to help the company scale. During the holding period, it has grown from 12 to 53 clinics through a combination of organic expansion and bolt-on acquisitions, notably The Laser Lounge. It also bought Aesthetics RX, a skincare brand.

Silk claims to be the third-largest specialist clinic operator in Australia by total number of outlets. Larger competitors include Laser Clinics Australia, in which KKR acquired a majority stake in 2017 at a valuation of A$650 million, facilitating a partial exit for The Growth Fund.

Some of Silk’s outlets are directly-owned and others are joint ventures or traditional franchises. The company offers a range of non‑surgical aesthetic products and services, including laser hair removal, cosmetic injectables like Botox, skin treatments, body contouring, and fat reduction services, as well as own-brand skincare products.

The plan is to reach 150 clinics by opening 6-10 per year. Australia’s non-surgical aesthetics market remains highly fragmented, with the five largest specialist chains holding a combined 31% share. Revenue is expected to rise from A$5.4 billion in 2020 to A$7.8 billion in 2024, although skincare products – as opposed to procedures – account for more than half of the projected totals.

Silk posted A$29 million in sales for the 12 months ended June, up from A$21.8 million the previous year. Over the same period, EBITDA rose from negative A$994 million to A$6.18 million, and the company swung from a net loss of A$2.16 billion to a net profit of A$796 million. This turnaround reflects a discrepancy in occupancy costs; they rose sharply in 2019 as more clinics opened but have been muted in 2020, likely due to COVID-19.

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• Topics
• Australasia
• IPO
• Consumer
• Australia
• Advent Partners