Macquarie bets on K-beauty manufacturing with ~$220M ODM deal
What's the deal? Macquarie Asset ManagementDealroom has a profile for this one. Try Dealroom → is acquiring South Korean cosmetics manufacturers Hwasung CosmeticsDealroom has a profile for this one. Try Dealroom → and NowcosDealroom has a profile for this one. Try Dealroom → for roughly US$251.5M (about $220 million, FX-converted). The Australian firm signed a stock purchase agreement on September 18 to buy a 70% stake in Hwasung and 100% of Nowcos from private equity operator Affirma CapitalDealroom has a profile for this one. Try Dealroom →.
What each company does: Both are original design manufacturing (ODM) specialists that make cosmetics for other brands. Hwasung focuses on color cosmetics, while Nowcos specializes in base cosmetics.
Why now? The deal targets the manufacturing side of K-beauty rather than consumer brands. It is read as a bet on the industry's expansion beyond brands into manufacturing and distribution infrastructure.
How the deal came together: Macquarie joined the final bidding for the stakes in early August, a sale led by Samsung SecuritiesDealroom has a profile for this one. Try Dealroom → and RothschildDealroom has a profile for this one. Try Dealroom →, and was named preferred bidder. A European strategic investor also expressed interest during the final round.
What's the endgame? Macquarie, headquartered in Australia, has mainly backed South Korean infrastructure companies, including DIG AirgasDealroom has a profile for this one. Try Dealroom →, LG CNSDealroom has a profile for this one. Try Dealroom →, and S&I Corporation. The purchase pushes it into a new consumer manufacturing sector.
What it means for the seller: Affirma Capital exits both investments, following its sale of Sung Gyung FoodDealroom has a profile for this one. Try Dealroom → earlier this year.
The signal: Investors are increasingly chasing the picks-and-shovels of K-beauty — the factories behind the brands — rather than the labels themselves. As global demand for Korean cosmetics grows, ownership of ODM capacity is becoming a strategic asset in its own right.
Read more: chosun.com
Image credit: Hwasung Cosmetics
