Affinity Equity Partners exits cosmetics company in KRW420bn trade sale

Affinity is said to have made a three to four times return on its initial investment, having bought the company for around KRW80bn ($69.2m) in 2005.

LG is believed to be putting up around 80 per cent of the asking price and recovering around KRW70bn ($60.5m) held by THEFACESHOP.

THEFACESHOP is number three in the domestic cosmetics market with about700 independent stores, KRW250bn in sales, and 19 per cent operating profit margin for each of the last four years since 2006.

LG has said that acquiring THEFACESHOP is a strategic response to persistent growth in the low-end cosmetics market due to bi-polarisation in consumption. The company hopes that the purchase will allow it to broaden its customer base to teens and twenties, segments in which LG is under-represented, and rationalise R&D, manufacturing and distribution.

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