Macquarie Asset Management has been named the preferred bidder to acquire Hwasung Cosmetic, a color-cosmetics original development manufacturer (ODM) whose clients include global beauty companies such as L'Oréal and Estée Lauder. Industry watchers put the sale price at more than 300 billion won ($216 million).
Private equity firm Affirma Capital, along with sale managers Samsung Securities and Rothschild, selected Macquarie as the preferred bidder, investment banking sources said on the 12th. The two sides plan to sign a definitive agreement after working out detailed terms.
The deal covers the 70% stake in Hwasung Cosmetic held by Asterion Holdings, a special-purpose company controlled by Affirma, together with a 100% stake in Nowcos, a maker of skincare-cosmetics ODM. Affirma has pursued a package sale bundling Hwasung Cosmetic, which is strong in color cosmetics, with Nowcos.
Five or six domestic and foreign financial and strategic investors submitted letters of intent in the preliminary bidding for Hwasung Cosmetic, according to sources. Qualified bidders included Macquarie as well as private equity firm Korea Investment Private Equity (KIPE). KIPE partnered with Ecopro as a strategic investor but was not selected as the preferred bidder.
Hwasung Cosmetic has built up a client base ranging from domestic indie brands to global customers such as L'Oréal and Estée Lauder, centered on eye makeup. It posted revenue of about 110 billion won last year, with earnings before interest, taxes, depreciation and amortization (EBITDA) of around 24 billion won. Nowcos reported revenue of about 69 billion won last year.
Affirma acquired its 70% stake in Hwasung Cosmetic for about 140 billion to 160 billion won in 2019. In 2022, it bought Nowcos to broaden its cosmetics product lineup.
