Australia's PE-backed Silk Laser set for take-private

EC, Hong Kong’s largest non-hospital medical services provider, has offered to acquire the company for AUD 3.35 per share, valuing it at about AUD 179m (USD 118.2m). It overcame competition from Wesfarmers, which submitted a AUD 169m bid earlier in April.

With Wesfarmers indicating that it would not make a counteroffer, Silk Laser said in a filing that it would recommend the EC proposal.

Silk Laser – which is active across laser hair removal, cosmetic injectables, skin treatments, and body contouring – was the subject of a buy-and-build programme under Advent before going public in December 2020.

Advent acquired the business in February 2018 via its seventh flagship buyout fund, which closed later that year on AUD 300m. It retained a 12.5% stake in Silk as recently as last September.

Wesfarmers’ offer of AUD 3.15 per share on April 19 had garnered support from Silk’s largest institutional backer, now Wilson Asset Management Group, which had a 9.3% stake at the time. The Wesfarmers offer had represented a 30.2% premium to the most recent closing price.

The stock, which had traded in a range of AUD 1.65 to AUD 2.65 for the prior 12 months, jumped to AUD 3.02 following the Westfarmers offer. It then hit AUD 3.42 in response to EC’s bid. The stock was trading at AUD 3.14 as of midday on June 5, giving the company a market capitalisation of AUD 166.3m.

Founded in 2009, Silk is regarded as a leading local clinic chain in its field with more than 50 locations. At the time of Advent’s acquisition, there were only 12 locations. The expansion has featured the implementation of data analytics to drive in-clinic performance, operational efficiency tools, and multi-channel marketing, as well as the development of the leadership team.

It was an exemplary build-out for the investor, pursuing mostly organic expansion plus one bolt-on. Revenue rose 460% during the two-year process, while EBITDA went from negative to positive. Advent had identified non-surgical aesthetics as going through a period of rapid professionalisation and consolidation.

Silk’s revenue came to AUD 81.2m for the 12 months ended June 2022, up 27.6% on the prior year. Net profit improved from AUD 5.1m to AUD 6.4m during the same period. For the first half of the 2023 financial year, revenue was up 21% year-on-year to AUD 49m, while profit was up 20% to AUD 4.9m.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Australasia
• Trade sale
• Healthcare
• Consumer
• Australia
• Advent Partners
• beauty & personal care