Private equity fund (PEF) manager Affirma Capital will make a new investment of up to 100 billion won in Blue Elephant, which operates sunglasses and eyeglass frame brands.
On the 7th, according to the investment banking (IB) industry, Affirma Capital recently signed a stock purchase agreement (SPA) and a subscription agreement (SSA) to invest up to 100 billion won in Blue Elephant.
Affirma Capital will first invest 75 billion won to acquire some of Blue Elephant's existing and new shares. It was reported to have secured an option to make an additional 25 billion won investment within six months.
Blue Elephant's corporate value was assessed at about 400 billion won. If Affirma Capital exercises the additional investment option, the post-investment equity stake is expected to rise to 25.8%.
Blue Elephant was founded in 2019 as the operator of the K-eyewear brand "Blue Elephant." It quickly scaled up its footprint, being called the "value-for-money Gentle Monster" for its trendy designs at reasonable prices.
Afterward, Blue Elephant faced turbulence when founding owner Choi Jin-woo, former CEO (who held a 51% equity stake as of the end of last year), was criminally indicted on charges of dead-copying Gentle Monster (IICOMBINED) and violating the Unfair Competition Prevention Act.
Affirma Capital is said to have decided to invest, giving high marks to Blue Elephant not only for its still-steep growth trajectory but also for its potential to expand overseas.
Last year, Blue Elephant opened "Space Seongsu" in Seongsu-dong and entered key overseas commercial districts such as Harajuku and Shinjuku in Japan. Last year's revenue was 50.7 billion won, up 69% from a year earlier.
Blue Elephant's financial structure is also expected to improve significantly with Affirma Capital's investment. If the 100 billion won fundraising is completed, the debt ratio, which was 307% at the end of last year, is projected to fall to below 60%.