Global private equity firms snap up K-beauty assets

A customer browses cosmetic products at a beauty shop in Seoul, Aug. 1. Yonhap

Global private equity firms are snapping up beauty-related companies in Korea, driven by growing consumer demand across the world, industry officials said Sunday.

KKR, a leading global private equity firm, said Thursday that it has acquired Samhwa for 733 billion won ($527.5 million) from TPG Capital Asia.

Established in 1977, Samhwa specializes in producing plastic containers and pumps used to dispense cosmetic products. Last year, the company recorded 186.8 billion won in revenue and 31.4 billion won in operating profit.

The acquisition is driven by KKR’s recognition of Samhwa’s unique competitive edge and the growing global demand for K-beauty products. Around 60 percent of its sales come from multinational clients such as L'Oreal, Estee Lauder, Chanel and LVMH.

On Tuesday, Blackstone said that it signed a definitive agreement to make a significant investment in Juno Hair, Korea’s largest hair salon franchise. While the investment amount was not disclosed, industry sources said the private equity firm valued the company at approximately 800 billion won.

Founded in 1982 with its first salon near Sungshin Women’s University in Seoul, Juno Hair has grown into Korea’s leading salon brand, operating over 180 locations nationwide with a workforce of more than 3,000. It also maintains a growing footprint across Asia, including Singapore, Vietnam and the Philippines.

Sonny Park, principal at Blackstone Private Equity, said it is "thrilled to be at the forefront of this trend," noting that it is "seeing explosive global demand for Korean beauty services."

With not only global corporations, but also private equity firms joining the wave, the global influence of K-beauty is expected to grow even further.

Last December, L'Oreal acquired Gowoonsesang Cosmetics, the operator of Korean skincare brand Dr.G, for approximately 255 billion won. It marked its second major investment in K-beauty since acquiring 3CE, a Korean color cosmetics brand, for about 600 billion won in 2018.

According to data released by the Ministry of Food and Drug Safety, Korea’s cosmetics exports reached a record high of $5.5 billion in the first half of this year, up 14.8 percent from a year ago.