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Unilever's new $2.6bn Korea move with Carver acquisition
27 September 2017, 12:18 | Vera Richards
Unilever has spent €2.3bn on beauty business Carver
Unilever said on Monday that it has agreed to buy South Korean cosmetics firm Carver Korea for 2.27 billion euros ($2.71 billion) from Bain Capital Private Equity and Goldman Sachs.
Unilever (LON:ULVR) has inked a deal to buy skincare business Carver Korea, the Anglo-Dutch company has said.
The range of products now includes its hero line "Eye Cream for Face", along with essences, toners, moisturisers, masks and sun protection. The group's shares have added more than 17 percent to their value over the past year, and are up by just under 30 percent in the year-to-date.
Bain and Goldman Sachs jointly bought about 60 percent of Carver for roughly $500 million previous year, a source familiar with the matter said on Monday.
Some argue that a company like Carver is safe from a backlash thanks to the popularity of its products in China, while others take the view that there is a serious threat and that South East Asia is a better bet for expansion. "It will significantly strengthen our position in North Asia, the largest skincare market in the world".
Unilever paid €2.27bn for its stake in Carver, a fast-growing skincare business which reported a threefold increase in revenues a year ago to €321m.
Bain and Goldman purchased a 60 percent share in Carver for 430 billion won in June previous year. The brand will also complement Unilever's existing portfolio, enabling it to provide consumers with luxury skincare products at affordable prices.
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. In 2015, Carver posted total sales of about $130 million.
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.
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