CJ wraps up $366 mn pre-IPO for top beauty chain

CJ Group has completed its pre-IPO placement for CJ Olive Young, the group’s health and beauty brand, with Glenwood Private Equity securing around a 24% stake in the company as the second-largest shareholder.

The deal was valued at around 400 billion won ($366 million), with Glenwood PE acquiring shares from the company's family shareholders. Olive Young is planning to go public in 2022.

Initially, the South Korea-based beauty chain's stake sale generated a lukewarm response from industry players as it was a non-management stake, making it less attractive. But the tables turned with major PE firms and retail companies participating in the bid.

Heated competition among potential bidders also pushed up CJ Olive Young's enterprise value; it was first estimated at around 1 trillion won, but surged to 2 trillion won with all of the final participants bidding over 1.5 trillion won. 

Last week, CJ Group selected Glenwood PE as the buyer of the minority stake, and the two parties signed the share purchase agreement on Dec. 24.

CJ Group chose Glenwood PE determining that a strategic partnership with the PE firm would boost CJ Olive Young’s valuation.
Glenwood PE has a solid reputation for specializing in carve-out deals, as noted by its previous ventures, including the acquisition of Halla Cement, formerly known as Lafarge Halla Cement, and home appliance maker Tongyang Magic. The firm set up an 800 billion won fund this year.

While contactless services have been on the rise due to the impact of the COVID-19 crisis, CJ Olive Young has proven its competitiveness as the country’s leading health and beauty store, with over 50% share of the sector. The company has been diversifying its product lineup and increasing online sales in line with changing consumer trends.

Meanwhile, CJ Group is expected to expedite its sale process for non-core assets. Currently, the group's subsidiary CJ Foodville Corp. is carving out its bakery chain Tous Les Jours and the CJ Logistics Corp. is seeking to sell its Chinese logistics firm CJ Rokin.

Write to Chae-yeon Kim at why29@hankyung.com
Danbee Lee edited this article.