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Classys' products on display at a 2021 exhibition Bain Capital on xxday agreed to buy a majority stake in South Korea's medical aesthetic device manufacturer Classys Inc., marking its third acquisition of a Korean beauty company, in a deal estimated at around 1 trillion won ($835 million).The acquisition followed the US private equity firm's two high-profile beauty deals in the country sealed between 2016 and 2017, including Carver Korea, which it sold to British consumer goods brand Unilever PLC for 3 trillion won in 2017. The two transactions topped the list of the most profitable exits in the country's M&A market. Bain acquired a 73.96% stake in Classys from xx , according to the Korean company's regulatory filing on xx day. The estimated transaction value of around 1 trillion won represents a 35% premium from its market price, or an elevenfold increase in its corporate value, compared with the 120 billion won valued in December 2017 when it made a debut on the country's junior stock market Kosdaq. Established in 2007 by dermatology specialist Jang Sung-jae, Classys supplies medical devices used for cosmetic procedures such as plastic surgery, anti-aging and excess fat removal.Founder and CEO Jang controls a 50.97% stake as of end-September 2021. His wife and two children hold another 22.87% stake in aggregate.The company owns three brands: Classys specializing in medical devices for clinics; Cluederm used at aesthetic clinics; and Skederm for personal beauty-care devices.In 2017, Classys went public through a merger with a special purpose acquisition company (SPAC). Among Kosdaq-listed companies that merged with SPACs, it currently has the highest market value.PRODUCTS, EARNINGSIts flagship product, Shurink, is an ultrasound-based device used at clinics to remove facial wrinkles and stimulate collagen reproduction in the skin. It has been rapidly gaining its market share since 2019, thanks to its moderate price and less painful therapies compared to rival devices.Its exports have been on the steady rise, led by China and South America. In particular, it is gaining popularity in Brazil, which ranks among the world's largest cosmetics markets.Classy's operating profit has tripled to 52 billion won in 2021 versus 17 billion won in 2018. Its consolidated sales more than doubled to 100 billion won during the period.This year, its operating profit is forecast to rise 35% on-year to 70 billion won, with sales seen up by one-fourth to 125 billion won, driven by new products such as Shurink Universe and Volnewmer.Shurink Universe is a high-intensity focused ultrasound (HIFU) treatment device for skin tightening, and Volnewmer is a radio frequency-based medical device."(Bain Capital) bet on Classys' global growth," said an investment banking industry source. "A combination of Classys' technology and Bain Capital's global network should boost its exports." Bain Capital Managing Director Lee Jungwoo (Courtesy of Bain Capital) Bain Capital has been putting its focus on the cosmetics industry and consumer businesses in South Korea, since Managing Director Lee Jungwoo joined the PE firm in 2015. Lee previously worked at Morgan Stanley's private equity division in Seoul and specializes in consumer, media, retail and technology sectors.Its 430 billion won acquisition of a skincare brand Carver Korea in 2016, jointly with Goldman Sachs, generated a sevenfold return just in one year. For Hugel Inc., the country's largest botox maker, Bain Capital took advantage of the conflict between its two co-founders, who locked horns not to give up their management rights over the company. It finally bought a majority stake in Hugel from the co-founders in 2018.Bain Capital is now set to pocket close to 1 trillion won in proceeds from the sale of a 46.9% stake in Hugel for $1.48 billion to a consortium of Korea's retail-focused GS Group, Abu Dhabi’s sovereign investor Mubadala Investment Co., Singapore-based private equity firm CBC Group and Seoul-based IMM Investment Corp.By Si-Eun Park and Jun-Ho Parkseeker@hankyung.comYeonhee Kim edited this article.
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