CVC poised to buy S.Korea’s top contact lens maker OLENS

CVC Capital Partners is in the final stage of talks to acquire OLENS, South Korea’s largest contact lens brand, for about 500 billion won ($343 million), according to investment banking sources on Thursday.

It is seeking to acquire more than a 50% stake in Star Vision Co., which controls OLENS, including the 49% stake owned by a consortium of PS Alliance and Pearl Investment.

CVC is also likely to purchase additional Star Vision shares from its founder and Chief Executive Park Sang-jin, who holds a 51% stake in the contact lens manufacturer. 

Star Vision is valued at around 800 billion to 900 billion won, based on which CVC is expected to pay about 500 billion won, including a management premium, the sources told The Korea Economic Daily. 

If finalized, the acquisition will mark the European private equity firm’s first buyout deal in South Korea since its purchase of the accommodation booking app Yeogi Eottae for 1.5 trillion won in 2019.

It follows the launch of CVC’s sixth Asia fund, which raised $6.8 billion at its final close in February.

 
The PS Alliance and Pearl Investment consortium acquired a 29% stake in Star Vision in 2022 from another Seoul-based investment firm, VIG Partners, for 200 billion won. The Korean consortium then assessed Star Vision’s corporate value at 420 billion won.

If the consortium succeeds in divesting its stake at the current valuation, it is expected to pocket double its investment. 

OLENS holds a 30% share of the domestic contact lens market and a 50% share of the colored contact lens market in South Korea.

For global expansion, it acquired Pink Icon, Hong Kong’s leading contact lens sales chain, in 2019. In Japan, OLENS operates a joint venture with a local medical device company. 

OLENS earlier boosted its global brand awareness by hiring K-pop idols and Korean drama stars, including girl groups such as Blackpink and NewJeans, as brand ambassadors. These marketing efforts helped it establish itself as a beauty brand.

In overseas markets, it focuses on online sales and is now preparing to expand into India and the Middle East.

In South Korea, OLENS sells its products only at offline stores because the country prohibits online sales of contact lenses.

Vertical integration in its supply chain – from research and design to manufacturing and distribution – is cited as another one of OLENS' key strengths.

OLENS has also entered the original equipment manufacturer (OEM) market through its wholly owned subsidiary.

Its owner Star Vision’s revenue has been growing since surpassing 100 billion won in 2021. In 2023, it reported 133.8 billion won in sales with an operating profit of 50.9 billion won. Last year, the company was estimated to have earned over 50 billion won in operating profit. 

Last year, CVC invested 200 billion won in Pharma Research Co., a medical device and cosmetics maker listed on the Kosdaq junior stock market, becoming its second-largest shareholder.

It is also reportedly considering acquiring Seorin Company, a small Korean cosmetics manufacturer.

Write to Jun-Ho Cha and Ji-Eun Ha at chacha@hankyung.com
 

Yeonhee Kim edited this article.