Juno Hair, a beauty salon brand, is in acquisition negotiations with the global private equity firm Blackstone, receiving a staggering corporate valuation of 800 billion won based on 100% equity. This is seen as a recognition of its global growth potential as a 'K' hair platform, going beyond a simple beauty franchise. However, some believe it is overvalued compared to its actual business stature.
On the 10th, investment banks (IB) and related industries reported that Blackstone has recently been selected as the preferred bidder for the sale of Juno Hair Group. The sale is being managed by Samjong KPMG. Currently, the equity of Juno Hair Group is fully owned by CEO Kang Yoon-sun and her special relationship stakeholders. It's reported that CEO Kang is considering transferring more than 50% of her equity to Blackstone while maintaining some share to continue participating in management.
Juno Hair Group is comprised of Juno, which manages the overall business, Juno Beauty, which operates the main beauty salon franchise business, Juno Academy, which trains beauticians, and Juno Depot, which distributes beauty products. It also includes subsidiaries such as Humble Bumble, which owns hair care brands, and Geunbok Gongyoung, which is involved in construction.
The 800 billion won valuation given to Juno Hair equates to 20 times its annual earnings before interest, taxes, depreciation, and amortization (EBITDA) of 37 billion won from the previous year. This 'multiple of 20' implies that the value assigned corresponds to 20 years' worth of actual cash earnings earned by the company in a year. Typically, the domestic and international beauty and service industries adopt a multiple in the range of 7 to 10 times, so Juno Hair's valuation is considered unusually high.
In other words, global investors believe that Juno Hair will stably generate profits at the current level for more than 20 years, interpreting their strong confidence in the growth potential and platform structure of 'K Hair.' The valuation of 800 billion won incorporates a future value analysis including the potential for systematizing the Korean beauty platform, the global growth of the K Hair brand, premium real estate assets, and a unique talent development and advancement system.
Juno Hair operates over 180 stores nationwide using a 'direct management + co-investment' model. Store managers who have been with the company for over 10 years open stores through co-investment with the headquarters, and the company also has its own promotion and training system (Juno Academy) that progresses from intern to designer to store manager. Individual stores operate as sole proprietorships under the name of their managers, but the headquarters recoups part of the sales through commissions, rent, and product sales, generating profits. Last year, Juno Hair's total annual revenue was 300 billion won, with EBITDA around 37 billion won.
Global investors consider Juno Hair Group's business model not merely as a beauty salon chain but as an 'education and platform-based standardization model for the K Hair industry.' Given its overseas expansion into Southeast Asia, North America, and the Middle East, along with diversification into academies and products, they see it as having the potential to grow into a global brand comparable to 'Korea's Vidal Sassoon and Tongyang's Tony and Guy.' In fact, Juno Hair has recently opened overseas stores in the Philippines, Thailand, and Singapore, and is preparing for additional entries in Japan and Vietnam. Juno Academy produces a number of foreign graduates annually.
Moreover, owning real estate in key locations such as Cheongdam and Seongsu (with a book value exceeding 200 billion won) is also cited as a strength. According to analysis by the IB industry, there is speculation that when including non-disclosed corporations, Juno Hair Group's actual real estate assets could reach a market value of 400 billion won.
On the other hand, some consider this transaction to be excessively overvalued. Due to the nature of the beauty industry, revenue and profits are distributed at the individual designer level, making it challenging to assess operating value based on headquarters criteria. There is also uncertainty about how much of the group's complex corporate structure and non-operating assets (such as real estate) will be included in the acquisition.
In fact, the revenue directly recognized by the headquarters (commissions, rent, etc.) was only 26 billion won last year. Even expanding to the entire group (combining product, commission, and rent revenue) only reached about 60 to 70 billion won.
An IB industry source noted, 'The 800 billion won valuation given to Juno Hair reflects expectations from the capital market regarding the platformization of the K Hair industry, its global scalability, and the asset value of premium properties.' However, there is growing interest in whether the actual business performance, management transparency, and growth in the global market will sustain this valuation.
Yang Je-kyung, head of the Milestone accounting firm, stated, 'Juno Hair has been divided into five corporations, and each corporation generates revenue unrelated to the beauty industry. It is difficult to accurately assess EBITDA generated from actual business activities,' adding, 'Additionally, it is not confirmed whether the valuation of 800 billion won includes the real estate held by Juno Hair.' He further commented, 'It is challenging to determine if the company's value is at an appropriate level compared to Juno Hair's EBITDA.'