Carlyle exits Hong Kong-listed Natural Beauty via buyback

Natural Beauty is one of Greater China's largest skin care product and beauty spa service providers, with a network of franchised beauty spas across mainland China and Taiwan. Carlyle invested in the business in 2009 via Carlyle Asia Partners III, as a holding company controlled in equal parts by the PE firm and the family owner paid HK$819.8 million ($105.8 million) for a 65.53% stake in Natural Beauty.

The ultimate beneficiaries on the family side continued to be Yen-Yu Tsai, the founder and chairwoman, and her two children, Chien-Cheng Su and Sh-Hsyu Su. Tsai's husband, Ming-Ta Lee, is vice chairman of the company.

The three family shareholders have now acquired Carlyle's 50% interest in the holding company for HK$565.6 million, taking their stake in Natural Beauty past the level required to trigger a mandatory buyout offer. They are offering to buy all outstanding shares at HK$0.86 apiece - equal to the effective per share price paid to Carlyle - for a total consideration of up to HK$592.4 million, according to a filing.

As of June 2015, Natural Beauty had 1,112 outlets - down from 1,372 the previous year - of which 1,094 were franchisee-owned spas. The mainland accounted for 807 of these, with a further 257 in Taiwan and 30 in other locations. Through this distribution network, the company sells a range of skincare products.

When Carlyle invested in 2009, the deal valued Natural Beauty at approximately HK$2.5 billion. The company's revenue for 2008 was HK$592.7 million, while net profit was HK$238.5 million.

The buyout offer from the family shareholders values the business at HK$1.72 billion. Revenue for the 2014 financial year came to HK$505.7 million, up from HK$439.4 million in 2013, while net profit reached HK$71.5 million compared to HK$58.5 million the previous year. Mainland China accounts for more than 80% of annual turnover.

Carlyle Asia Partners III closed at $2.55 billion in April 2010. Its successor closed last September at $3.9 billion.

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• Topics
• Exits
• Consumer
• Greater China
• Buyback
• China
• The Carlyle Group
• Consumer
• Exit