Private Equity Deals & Transactions

Bain Capital acquires South Korean cosmetics company

The private equity firm makes its first investment in South Korea with the $350m acquisition of Carver, a specialist cosmetics supplier, taking an 80 percent stake alongside investment bank Goldman Sachs.

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Bain Capital has picked up a controlling stake in Seoul-based cosmetics company Carver alongside investment bank Goldman Sachs, the firm said in a statement. Carver is a specialty cosmetics supplier to South Korea’s beauty salons.

The value of the deal was not disclosed, but the two US firms are said to be paying about KRW 400 billion ($350 million; €320 million) for an 80 percent stake in the company.

Bain’s investment came from Bain Capital Asia Fund III, a 2015-vintage vehicle that raised $3 billion. The fund invests in a range of sectors, from healthcare to consumer products and financial services. Its initial investment was in Chinese specialty hospital group Asia Pacific Hospital Group, which it had bought for $150 million in March.

Limited partner commitments in Bain’s third Asia-focused fund include $150 million from the Pennsylvania Public School Employees’ Retirement System, $90 million from the Maryland State Retirement and Pension System, and $25 million from the Los Angeles City Employees’ Retirement System, according to PEI Research & Analytics data.

Bain Capital, which oversees more than $75 billion of assets, said its investment in Carver is aimed at expanding the company’s products and services overseas. Following the deal, Carver Korea founder and chairman Lee Sang-rok will retain a minority stake and remain involved in the business.

Jonathan Zhu, a managing director at Bain Capital Private Equity, said that although Bain does not have an on-the-ground-presence in South Korea, it has been adding local expertise to their team for this particular market.

The Korean beauty industry has been growing rapidly as international demand, especially from the Chinese, continues to increase. Data from the Korea International Trade Association showed that the average revenue of Korean cosmetics exports to China has grown annually at a compound annual growth rate of more than 50 percent.

Founded in 1999, Carver’s product range covers about 1,000 cosmetics distributed across home shopping television networks, retail stores, and e-commerce in South Korea, China, and the US.