Korea's VIG makes first full exit from Fund III
VIG Partners has agreed to exit its 51% stake in eyewear brand Star Vision through a buyback by the South Korean company’s founder and current minority shareholder.
The transaction value will be finalized following confirmatory due diligence on Star Vision’s 2021 financial performance, but VIG expects to generate an approximately 2x return. This will be the first full realization from the private equity firm’s third fund, which closed on USD 600m in 2017.
VIG paid KRW 137.5bn (USD 129m) for a 42% interest in Star Vision in mid-2017. The GP also acquired KRW 33bn in convertible preferred shares, which on conversion, gave it a controlling stake.
Star Vision was founded in 2007 by Sang-Jin Park, who will return as CEO on VIG’s exit. The company is a specialist manufacturer of beauty contact lenses. Originally an online-only retailer, it expanded into the brick-and-mortar space in 2010. Star Vision claims to have the largest offline distribution network – primarily through third-party stores – of its type in Korea.
In 2017, revenue reached KRW 58.1bn, spurred by annual growth of 21% in the local beauty lens market over the previous five years. This was twice as fast as the overall contact lens market. Operating profit was KRW 18.2bn. Revenue and operating profit were KRW 100bn and KRW 22bn, respectively, in 2021. Both represent record highs.
“Since the initial investment, VIG and Mr. Park have successfully turned Star Vision into the largest player in the domestic beauty contact lens industry,” Chulmin Lee, a managing partner at VIG, said in a statement.
“In order to expand the company’s business more aggressively during a period of domestic and global uncertainty surrounding the resurgence of COVID-19, VIG has determined that it will be in the company’s best interest for Mr. Park to return as the CEO of the company.”
The GP is currently deploying its fourth fund, which closed on USD 810m in early 2020. There have been several partial realizations for Fund III, including the sale of distribution centres owned by food wholesaler Foodist, a dividend recap of chicken restaurant chain Bonchon, and the sale of a 10% stake in funeral services business Preed Life. The latter is a Fund III and Fund IV investment.
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