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| A branch of Missha in Seoul / Courtesy of Able C&C |
By Anna J. Park
Dozens of investors have shown interest in acquiring Able C&C, which was put up in the M&A market late last year, raising market expectations that IMM would make a successful exit from its years-long investment. Able C&C operates Missha, a well-known low-cost cosmetics brand, both in Korea and overseas. As countries are repealing their pandemic policies, potential buyers' interest in the acquisition of the cosmetics business has been buoyed.
According to investment banking sources Thursday, nearly 30 potential buyers, both in and outside of Korea, have contacted Credit Suisse, the manager of the sale deal, and submitted their non-disclosure agreements (NDA), asking for the investor memorandum of the firm.
"It's true that nearly 30 potential buyers signed NDAs, and there are more potential buyers abroad than in Korea," an investment banking source told The Korea Times on Thursday. "The investor memorandum is expected to be distributed simultaneously to all investors early next week."
Once the investor memorandum is sent out next week, market watchers expect the sale deal's preliminary bidding will take place in early or mid-March.
The timing seems right for the deal, given that the lifting of mandatory mask-wearing in Korea has occurred, except in a few specific settings such as when using public transport and entering hospitals. The easing of the mask rules is expected to raise demand for cosmetic products.
China's ending of its zero-COVID policies is also a boon factor for the company, which entered the Chinese market back in 2006. Before the pandemic, Able C&C's Chinese business entity posted an annual revenue of over 40 billion won ($32.6 million) in 2019. Revenue nosedived to 6.7 billion won in 2021, and now one can reasonably expect an ample upside to annual revenues from its overseas branches. Currently, Able C&C operates in 47 countries including the U.S., Japan, Southeast Asian countries and European countries.
IMM PE acquired its controlling stake for about 400 billion won in 2017, but has had difficulty increasing the corporate value and profitability of the cosmetics company due to COVID-19 shocks as well as changing market trends. Adopting new growth strategies of strengthening overseas markets and digital transformation, the company finally began logging consecutive quarterly profits during the first three quarters of last year, showing signs of a solid recovery from the pandemic.
