[Asia Economy Reporter Park So-yeon] The cosmetics brand Kahi, famous for its ‘Kim Go-eun Multi Balm,’ has entered the merger and acquisition (M&A) market. If the sale is successful, Kahi will change ownership just one and a half years after its launch.
According to the investment banking (IB) industry on the 3rd, Korea Tech has decided to sell its stake in the cosmetics brand Kahi and is currently in discussions with potential buyers. The IB industry estimates Kahi’s brand value to be around 250 billion to 300 billion KRW.
Kahi is a cosmetics brand launched last year by Korea Tech, a beauty device specialist company established in 2003. Within just one and a half years of its launch, Kahi has emerged as one of the hottest brands in the cosmetics industry. It is also reportedly attracting attention from major cosmetics brands such as Amorepacific.
Before launching Kahi, Korea Tech was the first to introduce in Korea the ReFa Carat, famous as the ‘Lee Young-ae roller,’ the Pao facial muscle exercise device endorsed by Psy, and the Sixpad abdominal muscle training device endorsed by Cristiano Ronaldo.
The company maintained steady operating profits ranging from 20 billion to 50 billion KRW but turned to losses starting in 2019. Operating profits were 23.2 billion KRW in 2016, 57.2 billion KRW in 2017, and 32.6 billion KRW in 2018, but operating losses of 13.7 billion KRW and 13.9 billion KRW were recorded in 2019 and 2020, respectively.
In this situation, Kahi, launched last year, increased its recognition through advertisements and product placements in dramas, and its flagship product, the ‘Multi Balm,’ has gained popularity, surpassing 3 million units sold since launch. Kahi’s annual sales are reported to be around 300 billion KRW.
Kahi recently extended its exclusive model contract with actress Kim Go-eun and signed a global model contract. Export inquiries have surged not only domestically but also overseas, opening export channels to 17 countries.
The largest shareholder of Korea Tech is CEO Lee Dong-yeol, who held a 67.31% stake as of the year-end audit report last year. Following him, Lee Hyun-sam is the second-largest shareholder, holding 11.27% of common shares and 18.78% of convertible redeemable preferred shares.
Meanwhile, Korea Tech CEO Lee Dong-yeol stated, "The rumors about the sale of Kahi are unfounded."
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