This article was published on Jan. 14, 2025, at 5:23 p.m. on the CHOSUNBIZ MoneyMove site.
CVC Capital, a UK-based private equity fund operator, is struggling to acquire Serin Company, which operates the cosmetics brand Round Lab. As the deadline for exclusive negotiations approaches, the next highest bidder, Gudai Global-Company K Partners, is emerging as a strong prospective buyer.
According to investment banking (IB) industry sources on the 14th, CVC Capital has yet to finalize the acquisition of Serin Company. The sale target is 100% equity of Serin Company held by the private equity fund operator Calyps Capital and MERITZ Securities.
Consequently, the Gudai Global-Company K consortium, which is reported to have bid the second highest price, is emerging as the next negotiation partner. Gudai Global is known for operating the domestic cosmetics brand 'Chosun Beauty,' famous for its 'No. 1 sunscreen on Amazon.' Company K is a venture capital firm but is pushing to expand into the institutional sector.
However, it has been confirmed that the sale's manager, Bank of America (BofA), has not yet contacted the Gudai Global-Company K consortium. Neither the seller Calyps Capital nor CVC Capital has provided any position on the potential breakdown of negotiations. The co-holder, MERITZ Securities, maintains that they are "in negotiations."
CVC Capital proposed a corporate value of 800 billion won for Serin Company at that time. The Gudai Global-Company K consortium is reported to have suggested a price in the mid-700 billion won range. Calyps Capital and MERITZ Securities successfully acquired Serin Company for 230 billion won last July, meaning that if they successfully sell it, they will have recovered their investment in just a year and a half.
As the performance of cosmetics companies has surged recently, it seems that Calyps Capital and MERITZ Securities have sought an early recovery. Another private equity operator, Theham Partners, also acquired the cosmetics brand 'Tirtir' for 89 billion won in September 2023 and sold it for 150 billion won in April the following year, yielding nearly double the original amount.
Calyps Capital and MERITZ Securities began the sale process in July by selecting BofA as the supervisor. It is reported that around six prospective buyers, including the Gudai Global-Company K Partners consortium, participated in the preliminary bidding held last October.
Serin Company recorded sales revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA) of 115.6 billion won and 55.7 billion won, respectively, in 2023. The sales growth rate reached 100% year-on-year, and it has shown an EBITDA margin rate in the 50% range, indicating rapid growth. Founded in 2017, Serin Company was co-founded by CEOs Lee Young-hak and Jeong Seo-rin and is a cosmetics manufacturer. The company's main brand, Round Lab, has gained fame for products such as 'Dokdo toner' and 'birch tree moisture sunscreen.'