Corporate Financing Analysis - Sellers' Market Sees Bumper PE Exit In South Korea - 09 OCT 2017


In line with our view that the market for private equity (PE) exits will enjoy a wave of deals as acquirers choose to tap into their sizeable cash reserves to complete strategic deals with increasing regularity, Bain Capital - together with Goldman Sachs - has completed a bumper sell-down of South Korea skincare firm Carver Korea to Unilever. The EUR2.27bn (USD2.7bn) deal will see the Anglo-Dutch consumer firm strengthen its foothold in Asia through Korea's lucrative skincare market and see Bain Capital return cash into the pockets of its investors in the process.

Ripe Market For Sell-Downs

For PE firms sat on portfolio assets, now is a good time to sell-down investment and provide return to their investors. Indeed, with key equity capital markets (ecm) around the world still on a bull run and with acquirers - both PE and private - still flush with cash, the window for exits is wide open at present be it via strategic stake sales or the equities arena. Against such a favourable backdrop for deals, which has seen global exit activity reach USD123.6bn in the first half, up from a tally of USD109.8bn recorded in H116 ( White & Case data shows), we fully expect the y-o-y increase in activity to continue on into the second half of 2017 too ( see ' PE Exits To Accelerate In H217 ' , August 8 2017). After all, there are plenty of assets on investment portfolios that are ripe for such deals and which have reached the end of their typical PE investment cycles: PitchBook data shows that around 40% of current PE-backed companies have been held for five years or more.

Assets To Be Sold
Global PE Exit Activity By Deal Value, USDbn
Source: White & Case , BMI

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