Korea Investment & Securities Arranges 200 Billion KRW Acquisition Financing for 'Wella'

Acquisition Financing Interest Rates Reported at 5% Range

[Asia Economy Reporter Hwang Yoon-joo] Korea Investment & Securities is arranging acquisition financing from the global private equity firm Kohlberg Kravis Roberts (KKR). This refinancing is for the acquisition funds of the newly established hair and nail subsidiary of the global cosmetics company 'Coty,' acquired by KKR in 2020.

According to the investment banking (IB) industry on the 15th, Korea Investment & Securities will finalize a refinancing contract this month for acquisition financing worth 200 billion KRW related to 'Wella,' acquired by KKR. Hana Financial Investment is also participating, and the interest rate is reported to be around 5%. The IB industry explains that with the recent rise in the base interest rate, the acquisition financing borrowing rate has also increased to the 5% level.

The domestic IB industry has recently been actively expanding overseas operations as part of market expansion over the past few years. Korea Investment & Securities arranging acquisition financing for KKR is in line with this trend.

In 2020, KKR acquired a 60% stake in a newly established company spun off from the hair and nail business division of the cosmetics company 'Coty' for 3 billion USD. The new company includes brands such as Wella, Clairol, and OPI. Coty expanded its hair business division by acquiring Wella from P&G (Procter & Gamble) in 2015. The hair business division was valued at approximately 7 to 8 billion USD, but due to the impact of COVID-19, hair salons closed, and product demand plummeted. As a result, the stock price also crashed, and it was sold to KKR at about half of its market value. Despite the attractive price, KKR reportedly faced difficulties in raising acquisition funds as the M&A market shrank due to the COVID-19 impact. It is reported that refinancing was initiated as the business conditions have recently recovered.

An IB industry official said, "We are turning our eyes overseas to expand alternative investments," adding, "There will be more cases where the domestic IB industry achieves various IB performances targeting overseas investors."

This content was produced with the assistance of AI translation services.