3 days ago
Global PEFs eye K-beauty boom
Overseas private equity firms are ramping up their pursuit of South Korea's beauty brands, eager to capitalize on the global K‑beauty boom.
CLSA Capital Partners, a private equity firm headquartered in Hong Kong, has been selected as the preferred bidder for a 50 billion won ($36 million) investment in Jungsaemmool Beauty, a cosmetics brand founded and directed by the renowned makeup artist Jung Saem-mool.
Driven by the rising popularity of Korean cosmetics, the company posted a revenue of 110 billion won and an operating profit of 12.1 billion won last year. Its annual earnings before interest, taxes, depreciation and amortization, or EBITDA, was estimated at around 20 billion won. The investment is expected to value the company at over 300 billion won.
With the investment, Jungsaemmool Beauty plans to gear up its expansion in the US market. Operating over 1,300 stores across 200 countries, the cosmetics brand is expected to further accelerate its global growth.
CLSA Capital Partners is an alternative investment management arm under the Chinese state-owned investment company Citic Group. It manages assets worth $5 billion across the Asia-Pacific region.
The investment decision reflects China's surging interest in Korean beauty brands, proven through export data.
In the first half of this year, exports of local cosmetics products hit the record high figure of $5.5 billion, marking a 14.8 percent surge from $4.8 billion in the same period of last year, according to tentative data provided by the Ministry of Food and Drug Safety earlier this month.
By country, China was the largest export destination, accounting for 19.6 percent of total outbound shipments, followed by the US at 18.5 percent and Japan at 10 percent, respectively.
The surging interest from global private equity funds is not limited to K-beauty cosmetics. Increasingly, investors are turning their attention to the service side of the Korean beauty industry, including premium salons.
For instance, the US private equity giant Blackstone is reportedly in advanced discussions to acquire hair salon franchise Juno Hair, having been selected as a preferred bidder. Juno Hair operates roughly 180 hair salons here.
Though exact details on the deal have not been shared, Juno Hair is projected to be valued at up to 800 billion won. The brand posted approximately 300 billion won in revenue and an EBITDA of 30 billion won in 2024.
Over the recent years, Juno Group, the hair salon operator's parent company, has been putting in efforts to expand its business globally, with an aim of opening 300 Juno Hair stores by 2028.
The company stated that 'no decision has been finalized and discussions are ongoing,' but noted that it is 'seeking the best possible partner to expand the Juno Hair brand globally.'
