Shinsegae, Ascent Equity Partners weigh acquisition of C&C International

South Korean retail giant Shinsegae Group is seeking to acquire local color cosmetics manufacturer C&C International Co. in partnership with private equity firm Ascent Equity Partners to strengthen its presence in the fast-growing beauty industry.

According to investment banking industry sources on Sunday, Seoul-based Ascent Equity Partners has set up a special-purpose company with an aim to acquire a controlling stake in C&C, a Kosdaq-listed firm specialized in original design manufacturing (ODM) of makeup products.

Shinsegae is in discussions with Ascent to join the fund as a limited partner and strategic investor – a move that would give the retail conglomerate indirect exposure to the fast-growing cosmetics ODM segment.

The proposed deal, valued at 285 billion won ($208 million), would involve Ascent purchasing about 20% of C&C’s shares held by founder and Chief Executive Bae Eun-chul and related parties for 140 billion won, while also subscribing to 3.61 million newly issued shares worth 145 billion won.

The new shares are priced at 40,100 won apiece and will be subject to a one-year lock-up, with the transaction slated for completion by Aug. 29.

C&C’S MANAGEMENT WILL REMAIN IN PLACE

Established in 2020, Ascent Equity Partners is a dedicated private equity investment firm that specializes in growth investing, strategic investing and buyouts.

Founded in 1997 and listed in 2021, C&C International specializes in color cosmetics such as lipstick, eyeliner and foundation.

Its products include gel eyeliner pencils, lip liner pencils and lip tints, with supplies to more than 100 clients worldwide, including Amorepacific Corp., CLIO Cosmetics Co. and the L'Oréal affiliate Stylenanda.

While its domestic peers Kolmar Korea Co. and Cosmax Inc. dominate the skincare ODM segment, C&C has carved out a niche in decorative cosmetics.

Despite the expected ownership change, C&C’s existing management will likely remain in place and continue running the business, sources said.

SHINSEGAE’S FIRST ODM ACQUISITION

The proposed acquisition is led by Shinsegae Inc. affiliate E-Mart Inc., overseen by Group Chairman Chung Yong-jin.

The aim is to leverage C&C’s manufacturing capabilities across Shinsegae’s retail and distribution channels, including department stores, duty-free outlets and e-commerce platforms.

Separately, Shinsegae International Co. operates a cosmetics business.

“This is the first time a major domestic conglomerate has pursued a cosmetics ODM acquisition as part of a broader strategic initiative,” said an industry official. “Shinsegae has long been exploring opportunities in the ODM space and sees this as the right fit.”

A Shinsegae Group official said the conglomerate is internally discussing an investment in the fund, but “nothing concrete has been determined.”

Meanwhile, Sginsegae is in talks to sell its two mobile payment units – SSG.COM’s SSG Pay and Gmarket Inc.’s Smile Pay – to Kakao Pay Corp. as part of corporate restructuring, according to industry sources on Sunday.

Write to Da-Eun Choi at max@hankyung.com

In-Soo Nam edited this article.