Japan's Aspirant buys beauty brand John Masters Organics

Mergermarket, AVCJ’s sister publication, reported in December 2021 that advisors had been appointed to run a sale process. Permira bought a majority stake in the company at an enterprise valuation of JPY 37bn (USD 336m) in 2016 and exited to its local partner in 2020. Bloomberg reported several months earlier that the private equity firm was working on a USD 200m sale.

JMO ran into trouble in 2017 when it emerged that non-organic ingredients were being used in certain haircare and skincare products marketed as wholly organic. The company made a public apology and announced a voluntary product recall.

Permira’s investment was predicated on unifying separately held brand and distribution assets and driving expansion, primarily in Asia ex-Japan. JMO had already built up a significant market share in Japan – which, at the time, accounted for 50% of revenue – through a strong retail concept based on encouraging customers to try products in-store and an emphasis on premium organic ingredients.

JMO originated in the US as a haircare specialist and later expanded into skincare and body care. In 2007, Yoshimune Noda and Maiko Noda took JMO into Japan, making it bigger than in its home market. They acquired 65% of the brand in 2013, with founder John Masters retaining a minority stake. Meanwhile, local distributor Styla was sold to Rising Japan Equity (RJE).

The situation became complicated when RJE started talking to several domestic personal care companies about a potential exit. A sale process stumbled, partly because RJE wanted a cash exit, while the Nodas wanted a partner to support expansion.

Permira’s solution was to buy a controlling stake in the brand and Styla. The Nodas swapped their interest in the brand for 40% of the combined entity. Permira held most of the rest, with John Masters reduced to a single-digit percentage interest. Permira’s exit in 2020 saw the Nodas take full ownership of the company.

JMO was on course to generate around JPY 1bn in EBTIDA for the 12 months ended September 2022, up from JPY 500m the previous year, Mergermarket reported. The company had 40 directly owned stores in Japan and distributed in 30-40 other countries through wholesale arrangements.

Aspirant said in a statement that it would work with management on various expansion plans, including the development of a “green beauty” initiative characterised by organic ingredients. The private equity firm is currently deploying its third fund, which closed in 2019 at the hard cap of JPY 50bn. It represented a near 100% size increase on the previous vintage.

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• Topics
• North Asia
• Consumer
• Buyouts
• Japan
• Aspirant Group
• Permira Advisers
• beauty & personal care