Published: Wed, September 27, 2017
Markets | By Erika Turner

Unilever to Buy Skincare Firm Carver Korea for $2.6B

Unilever to Buy Skincare Firm Carver Korea for $2.6B

The company on Monday announced its acquisition of leading skin care brand Carver Korea from Goldman Sachs and Bain Private Equity for $2.68 billion (2.27 euro). It is South Korea's third largest cosmetics company after AmorePacific and LG Household and Healthcare.

Founded in 1999, Carver Korea is known for its signature brand AHC under which it makes products for age management, hydration and nourishment.

It is the Anglo-Dutch company's biggest acquisition in six years and comes six months after it fended off a £115 billion takeover attempt by Kraft Heinz, Alex Ralph points out for the [London] Times.

Bain and Goldman Sachs jointly bought a roughly 60 per cent majority stake in Carver for around $500 million previous year, a source familiar with the matter said on Monday.

Unilever purchased a 95.39 percent stake, including 60.39 percent owned by Goldman Sachs and Bain Capital.

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Goldman and Bain bought the stake in Carver, whose beauty product brands including flagship skincare line A.H.C., just a year ago.

Investment banks (IB) explained that Unilever's acquisition of the AHC line for 16 times its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of Euro 137 million can be interpreted as a plan for the second takeoff in the Chinese market which is now suffering stagnation. AHC's products also include moisturizers, toners and sun protection.

"Unilever said that Carver's 2016 sales were 321 million euros ($381 million) with core profit of 137 million euros".

South Korean cosmetics companies had robust growth in past years, helped by strong Chinese demand, which has weakened recently amid geopolitical disputes in the region.

Carver's position in Korean beauty - particularly given South Korea is the fourth largest skin care market in the world - will bolster Unilever's position within Asia's beauty market and the global personal care category, the company said.

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