IMM PE Pushes for Separate Sale of A'pieu
Sale Price Estimated at Around 50 Billion Won
Large Investments Flock to Gudai Global, Leaving A'pieu Sidelined
Able C&C's brand 'A'pieu' has been put up for sale, but the market response has been lukewarm. This stands in stark contrast to the recent string of 'jackpot' investment cases in the K-beauty market, where billions of won in investment capital have poured in.
According to the investment banking (IB) industry on October 1, private equity fund IMM Private Equity (IMM PE) is attempting to sell only A'pieu, separating it from Able C&C, which also owns the cosmetics brand Missha. Samjong KPMG was selected as the lead manager for the sale, and teaser letters (investment information documents) were distributed to potential buyers. However, it has been reported that there has been little response from the market for over two months.
Able C&C is considered the 'problem child' of IMM PE. In 2017, IMM PE acquired a 25.5% stake from the company's founder and former chairman, Seo Youngpil, for 188.2 billion won. Through a public tender offer, paid-in capital increase, and acquisition of existing shares, IMM PE increased its stake to 61.5%. The total amount invested to acquire management control reached 420 billion won.
However, nearly a decade after the acquisition, IMM PE is still struggling to recover its investment. Immediately after the acquisition, sales plummeted due to the THAAD crisis, and the impact of COVID-19 further exacerbated the situation, resulting in operating losses. Although attempts to sell the company began in September 2022, continued losses and a falling stock price hindered the process. Ultimately, the sale was withdrawn in July 2024.
In response, IMM PE has turned to a split sale strategy. With a full sale appearing difficult, the decision was made to separate A'pieu and restructure the business around the core brand Missha in order to lower the difficulty of the sale. Another reason for the split sale is the global K-beauty boom, which is centered on domestic color cosmetics. A'pieu mainly targets consumers in their late teens to mid-twenties, focusing on mid-priced color cosmetics such as cushions and lip tints.
The problem is that the current K-beauty craze is actually making it harder to sell A'pieu. As investors in recently listed beauty companies APR and Dalba Global have achieved returns of several dozen times their investments, the market is now desperately searching for the next APR or Dalba Global.
For example, the unlisted company Gudai Global recently attracted 800 billion won in investment, with its corporate value recognized at approximately 4.4 trillion won. Investors including IMM PE, Premier Partners, IMM Investment, and JKL Partners all rushed to participate. In addition, other beauty companies such as The Founders and Vinow also saw a surge of investment from institutional investors and venture capital firms.
In contrast, A'pieu is generally regarded as less attractive compared to companies that have recently secured investment. A'pieu's corporate value is estimated at around 50 billion won. It accounts for only 10% of Able C&C's total sales, making it too small to emphasize its appeal as an independent brand. Although there have been signs of a recent rebound, the brand has suffered from prolonged sluggishness and has not demonstrated clear growth potential, according to market observers.
An IB industry insider said, "If the sale of A'pieu is successfully completed, the disposal of remaining brands such as Missha is also likely to accelerate," adding, "Given its positioning in the low-priced cosmetics segment and its potential in the Chinese and Southeast Asian markets, there is still a possibility for a sale. However, since investment capital is currently concentrated on specific companies in the beauty market, it is likely to take a considerable amount of time."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
