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Affinity in $242m Korean exit

The Hong Kong-based firm has sold its 70.2% stake in cosmetics company TheFaceShop for an estimated 3.5x return.

Affinity Equity Partners has agreed to sell its 70.2 percent stake in Korean cosmetics company TheFaceShop to LG Household & Health Care for KRW278.5 billion ($242 million; €161 million).

Affinity Equity Partners did not respond to requests for comment at press time.

Affinity is expected to make a 3.5 times return on its October 2005 investment in Korea’s third largest cosmetics company. At the time, the firm acquired the stake for KRW80bn in a leveraged buyout, according to media reports.

TheFaceShop: Pretty good returns



TheFaceShop’s chairmain, Jung Woon-Ho, is also selling a 19.8 percent stake in the company for KRW71.5 billion to LG Household & Health Care. The remaining 10 percent share, which Jung owns will be acquired by LG Household & Health Care in two years, according to an LG statement. 

Some of Affinity’s most successful exits have been in Korea. The firm’s exit from electronics retailer Himart fetched it 10 times cash while its exit from auto parts-maker Mando earned it five times cash.

Last month, Affinity invested $200 million for a stake of 94 percent in energy-saving device maker Beijing Leader & Harvest Electric Technologies.

In July, the firm acquired 50 percent of South Korea’s Oriental Brewery. US private equity firm KKR had acquired the brewery from Anheuser-Busch InBev for $1.8 billion in June. A month later, KKR announced Affinity was sharing the investment with KKR. Affinity paid $400 million for its 50 percent stake.

Presently, Affinity is investing out of Affinity Asia Pacific Fund III, which closed on US$2.8 billion in 2007. As of October, the fund is 50 percent invested. The firm has offices in Hong Kong, Seoul, Singapore, Sydney and opened an office in Jakarta earlier this month.