This article was published on Jan. 3, 2025, at 5:11 p.m. on the CHOSUNBIZ Money Move (MM) site.
The beauty brand IZEN TREE, known for its "pores improvement booster shot," has come up for sale. Recently, with the K-beauty industry entering its second heyday centered around the United States and Japan, the company's valuation is reportedly discussed at 300 billion won. CJ Olive Young is seen as a strong candidate for acquisition in the market.
According to the beauty and investment banking industry on the 3rd, IZEN TREE has recently selected an advisory firm for its sale and initiated contact with potential acquirers. The target for sale is the management equity stake of CEO Kim Jin-woo, the founder and largest shareholder. Deloitte Anjin is reported to be the advisory firm for the sale.
IZEN TREE was established in 2009 by CEO Kim, who had operated a cosmetics ingredient analysis blog, positioning itself as a brand that uses "healthy cosmetics with good ingredients." Its representative products include the "Onion Booster Shot," a pore improvement functional cosmetic using red onion extract, and the "Hyaluronic Acid Toner," a skin moisturizing product.
The industry mentions a maximum valuation of 300 billion won. This figure is based on an EBITDA of about 20 billion won with a 15 times multiple applied. This is due to the assessment that rapid growth is being achieved abroad, particularly in the U.S. The provisional sales last year were reported at 60 billion won, a 73.4% increase compared to the previous year (34.6 billion won). Last year’s operating profit was recorded at 20 billion won.
The domestic cosmetics industry is rapidly growing, fueled by the popularity of K-beauty. By November of last year, the domestic cosmetics export value exceeded 13 trillion won, breaking its all-time high. Korean cosmetics are among the most imported by the U.S.
Leading this trend are small and medium-sized cosmetics brands like IZEN TREE, commonly referred to as indie brands. IZEN TREE entered the U.S. market in 2017 and is now in over 40 countries. It is said to generate more than half of its total sales overseas.
Given the situation, it has been identified that major domestic cosmetics and distribution companies are on the list of potential acquirers for IZEN TREE. In particular, CJ Olive Young, which operates health and beauty stores, is said to be actively pursuing the acquisition of IZEN TREE.
CJ Olive Young raised brand development in its global growth strategy announcement last May. This is part of its strategy for expanding K-beauty brands due to the difficulty of directly entering international distribution markets. CJ Olive Young previously also entered the acquisition battle for Kreaver Corporation, known for Skin 1004.
In the beauty industry, it is believed that CJ Olive Young can achieve a synergy effect by leveraging its existing distribution network to grow K-beauty brands. This is a strategy that could enhance market dominance. IZEN TREE products are already available in both offline stores and online malls of CJ Olive Young.
An investment banking industry source noted, "CJ Olive Young has consistently sought to internalize K-beauty brands while observing the acquisitions of Hince by LG Household & Health Care and Amuse by Shinsegae International," adding that "despite the high valuation of IZEN TREE, they appear to be actively pursuing it."