KTB PE earns 100% return from US brand sold to P&G

South Korea-based KTB Private Equity has earned a 100% return from Farmacy Beauty, just a year after its investment, following Procter & Gamble's (P&G) acquisition of the US skincare brand late last year.

KTB PE invested an undisclosed amount in December 2020 to take a 30% stake in the independent beauty brand, established in 2015.

The US consumer goods giant P&G took it over for $350 million, according to investment banking sources last week.

Based on the deal value, KTB PE is estimated to have pumped between 50 billion and 60 billion won ($42 million-$50 million) into Farmacy Beauty and sold its stake for around 110 billion won ($90 million), according to calculations by Market Insight, the capital markets news outlet of The Korea Economic Daily.

Farmacy Beauty produces basic skincare products from natural ingredients, with around $8 million in sales last year.

Dubbing itself as a "farm-to-face" brand, it has rapidly built market share both online and offline. It sells lotions, creams and cleansing products on Amazon.com and through LVMH-owned retailer Sephora.

Back in 2020, KTB PE's CEO Song Sanghyon beat global competitors to secure the investment in the fast-growing skincare startup thanks to his relationship with Farmacy's top management, the sources said. 

Farmacy Beauty's founder and CEO David Chung is believed to be an American of Korean descent.

Last year, KTB PE took full control of Sungmyung Ind. Co., a domestic wrapping paper and packaging materials producer, from the founding families of BYC Co., a leading Korean underwear brand. It also acquired MG Food Solution, a Korean seasoning sauce manufacturer in the same year. It did not provide details of both deals.

Song has since mid-2016 been leading KTB PE, an affiliated company of KTB Investment & Securities Co. and KTB Asset Management Co. He previously worked as vice president of Lehman Brothers and managing director and South Korea head of Asia-focused buyout firm Unitas Capital.

He holds an MBA from Columbia Business School and a bachelor's degree in East Asian studies from Harvard University.

Write to Jun-ho Cha at chacha@hankyung.com
Yeonhee Kim edited this article.