Nearly 20 PEFs chase pre-IPO shares in CJ Olive Young

2020.10.16 11:16:55 | 2020.10.16 11:45:34

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Private equity funds from home and abroad are going after pre-initial public offering (IPO) stake in CJ Olive Young Corp. with bets on big returns after Korea’s No. 1 health and beauty goes public in 2022.

Nearly 20 PEFs including Carlyle, IMM Private Equity, Hahn & Company, and Glenwood Private Equity, reportedly have applied for the stake offering from CJ Group owner families.

CJ Group, parent of CJ Olive Young, has reportedly put up some of shares held by founding family members in the pre-IPO sale package. In addition, the private placement will include new shares, as the company seeks to bulk up and raise its enterprise value before IPO in 2022.

The company’s pre-IPO plan was revealed to the public in early September through CEO’s letter to employees. At that time, the corporate chief stated there would be no change in the 55 percent stake held by CJ Corp., CJ Olive Young’s largest shareholder and the holding entity of parent CJ Group, to assure that pre-IPO would not alter management control.

Instead, the shares placed up for sale through the pre-IPO private placement reportedly involve 20 to 30 percent stakes held by CJ Group’s owner family who need to hoard to afford inheritance tax to succeed ownership.

Since CJ internally puts CJ Olive Young`s value at minimum 1 trillion won ($873 million), the pre-IPO offering could be worth 300 billion won.

Chairman Lee Jay-hyun’s eldest son Sun-ho has a 17.97 percent stake in CJ Olive Young and his daughter Kyeong-hoo a 6.91 percent. His younger brother Jae-hwan owns holdings of 10.03 percent.

CJ Olive Young is Korea’s No. 1 health and beauty retailer with a market share of 50.9 percent. It is estimated to have earned 87.9 billion won in operating income on sales of 1.96 trillion won last year, according to IBK Investment & Securities report. The figures are up 81 percent and 18 percent, respectively, from a year ago.

By Kang Doo-soon, Park Chang-young, and Cho Jeehyun

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