This article was posted on the ChosunBiz MoneyMove (MM) site at 10:29 a.m. on Oct. 30, 2025.
Since it was sold in July to Well to Sea Investment (hereinafter Well to Sea), cosmetics manufacturer Ncos has shown visible improvement in performance. It has been only three months since the major shareholder changed. In particular, analysts say it was effective that the company removed the second-largest shareholder, who had clashed with the largest shareholder in litigation.
Ncos's annual sales this year are estimated to increase by about 40% from last year. Until now, growth had stagnated because it could not make timely, proper investments while engaged in prolonged court battles with the second-largest shareholder, but Well to Sea's acquisition, normalization of management and execution of large-scale investments are credited with quickly boosting performance.
According to investment banks and the beauty industry, Ncos is expected to record sales of more than 250 billion won this year. That is about a 40% increase from last year's sales (178.7 billion won). Earnings before interest, taxes, depreciation and amortization (EBITDA) are estimated to be in the mid-20 billion won range.
Ncos was sold to Well to Sea in July. For a total of 136.5 billion won, the founders and shareholders — Chief Executive Hong Seong-hoon, private equity firm Praxis Capital Partners (hereinafter Praxis), Timefolio Asset Management and LLH Partners — sold a combined 66.7% stake. Considering that 66.7% was sold for 136.5 billion won, the total company value was effectively recognized at about 204.6 billion won.
The EBITDA multiple was reported to be less than 10 times. For that reason, some in the market argued that Ncos was sold at an undervalued price given the K-beauty boom at the time.
Before the change of the largest shareholder, Ncos was embroiled in litigation and was unable to make proper investments, leading to stagnant growth. Praxis, the second-largest shareholder of Ncos, invested 30 billion won in Ncos in 2018 in the form of redeemable convertible preferred shares (RCPS), and later requested early redemption when Ncos failed to go public within the promised period (within three years).
The two sides fought in court from 2023 over what interest rate to set. Ncos said it would repay applying a 6% compound interest as agreed, but Praxis argued it should receive 19% interest, including penalty interest for breaching the agreement. Praxis won at the first trial, but the result was reversed at the appellate level, and after going to the Supreme Court, Ncos ultimately prevailed.
By buying Praxis's equity, Well to Sea, the new largest shareholder of Ncos, effectively allowed Praxis to exit at a return higher than a 6% internal rate of return (IRR), but far below the penalty interest Praxis had sought. Because the investment period was long, the IRR is estimated to be only about 7%.
Industry insiders say it is very unusual for a financial investor to sue a company in which it has invested. They suggest that if Praxis had negotiated well with CEO Hong instead of litigating, both Ncos and Praxis might have achieved a win-win outcome. An investment banking industry official said, "I wonder whether they really had to file a lawsuit, but Praxis probably had to take some action because of the fund's limited partners."
Industry observers have expressed regret that Ncos missed the golden time for growth while continuing litigation with Praxis. They say the company could not invest on time because it was spending on legal costs.
According to the investment banking industry, Ncos has continued large-scale investments, including starting the expansion of its second plant immediately after the change of the largest shareholder. If it is completed at the end of this year, expanding production capacity (CAPA) could increase next year's sales to as much as 400 billion won.