VIG Partners Raises 70 Billion KRW Secured by The Skin Factory Shares

Expansion of Distribution Network, Steady Increase in Corporate Value through Acquisition of Able Korea

VIG Partners, a domestic private equity (PE) firm specializing in management participation, secured 70 billion KRW in funding using shares of The Skin Factory as collateral. The funds will be used to repay the loan borrowed for the acquisition and merger (M&A) of The Skin Factory, with the remaining amount planned for dividend payouts, investment recovery, and new investments.

According to the investment banking (IB) industry on the 26th, VIG Partners obtained a 70 billion KRW stock-collateralized loan through KD Investment Purpose Company (KD Investment Holdings). KD Investment Holdings is a special purpose company (SPC) established by VIG Partners to acquire The Skin Factory. Currently, Lee Cheol-min, CEO of VIG Investment Partners, is listed as a director.

KD Investment Holdings put up 100% of The Skin Factory shares (2,000 shares) as collateral to raise funds. The lenders set a pledge on these shares. The loan maturity is three years, but repayment is to be made in installments within the term.

This stock-collateralized loan was executed in two tranches based on collateral rights and loan repayment priority: senior tranche (Tranche A) of 60 billion KRW and subordinated tranche (Tranche B) of 10 billion KRW. The loan amount increased by 20 billion KRW from the 50 billion KRW borrowed as acquisition financing at the time of share acquisition. Several financial companies, including Hi Investment & Securities, participated as investors.

The Skin Factory is a beauty and household goods company owning the ‘KUNDAL’ brand. It mainly sells fragrance-related products such as shampoo, body wash, diffusers, and kitchen detergents, as well as skincare products like repair cream, ampoule mask packs, and relief toner through online channels such as Coupang. Since its establishment in 2016 as a cosmetics manufacturing and sales company, it has steadily increased sales. In 2021, VIG Partners acquired 100% of The Skin Factory shares through KD Investment Purpose Company.

After VIG Partners’ acquisition, The Skin Factory faced difficulties due to the COVID-19 pandemic but its corporate value has steadily increased. Last year, sales reached 96.5 billion KRW, up about 16 billion KRW from 80.6 billion KRW in 2021. Operating profit also rose from 10.4 billion KRW to 11.6 billion KRW during the same period.

Recently, through a bolt-on strategy, VIG Partners acquired Able Korea, the operator of the overseas beauty brand ‘Nacific,’ expanding its global distribution network. The bolt-on strategy involves acquiring similar companies to enhance corporate value. Able Korea has grown mainly through various online channels in over 10 countries including Indonesia, Myanmar, and Japan, which is expected to aid the global expansion of the KUNDAL brand. An IB industry insider commented, "Since VIG Partners acquired The Skin Factory, corporate value has continued to rise through distribution network expansion and global M&A," adding, "The scale of acquisition financing is also increasing proportionally with corporate value."

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