IMM PE pitches A’pieu sale in breakup of struggling Able C&C

IMM Private Equity Inc. is pursuing a separate sale of A’pieu, a color makeup brand under Able C&C Co., as the Seoul-based private equity firm has revived efforts to offload its troubled beauty portfolio in a deal that could fetch around 20 billion won ($14.4 million) amid the global K-beauty sensation.

The move comes after IMM PE’s repeated failures since 2022 to divest Able C&C in its entirety, largely due to valuation gaps and the company’s lackluster performance.  

According to sources in the investment banking industry on Friday, IMM PE has sent out teaser letters to potential buyers to sell A’pieu after picking Samjong KPMG Accounting Corp. as the lead advisor on the sale.  

Considering the total market capitalization of Able C&C is estimated at about 240 billion won, A’pieu could be valued at approximately 20 billion won.

IMM PE is betting that a standalone sale of A’pieu will prove more appealing than the full company, considering the latest global craze for Korean cosmetics is mainly driven by exports of affordable color makeup products to the US.

A’pieu, a sister brand to Korea’s first-generation low-cost cosmetics brand Missha, is popular among younger consumers, like teens and those in their 20s, and is famous for its low-priced lip tints, cushions and blushers – most priced under 30,000 won.

It accounted for roughly 10% of Able C&C’s 264 billion won in sales last year, behind Missha’s 80%. The company posted 19.7 billion won in operating profit in 2024.

LAGGING ASSET


As a whole company, Able C&C has struggled amid shifting consumer trends and geopolitical tensions.  

In 2017, IMM PE acquired a 25.5% stake in the cosmetics company from its founder and former Chairman Seo Young-pil for 188.2 billion won. Since then, it has raised its holdings to 61.5% through a rights offering and a public tender offer.

In total, the PE firm has invested over 420 billion won in Able C&C.

But the investment soured following China’s boycott of Korean products in retaliation for Seoul’s deployment of a US-made Terminal High Altitude Area Defense System (THAAD) in 2016.

With Chinese shoppers once making up a significant share of Able C&C’s sales, the loss dealt a heavy blow.

COVID-19 further exacerbated the decline, with the firm slow to adapt from brick-and-mortar to online, leaving it trailing rivals.

Its operating profit, which reached 11.2 billion won in 2017, swung to losses in 2018 and again in 2020-2021. A turnaround only came in 2023 after aggressive restructuring, including store closures.  

LONGTIME EXIT CHALLENGE


Since September 2022, IMM PE has sought an exit at valuations as low as 150 billion won, well below its total investment. Bids reportedly hovered closer to the low 100 billion won range, and the PE firm shelved the sale process last July.  

But the time is approaching this year to return capital to limited partners that chipped in IMM PE’s RoseGold III, a 1.26 trillion won blind pool raised in 2015.

While most portfolio assets of the fund have been monetized, Able C&C remains one of the few laggards.

IMM PE has since streamlined Able C&C, closing all retail stores of the company and halting investment in underperforming brands, such as Stila and Chongongjin.

It now focuses on core brands – Missha and A’pieu – as global appetite for affordable Korean color cosmetics surges.

Write to Eun-Kyung Song and Da Eun Choi at norae@hankyung.com
Sookyung Seo edited this article.