Alternative investor CLSA Capital Partners is set to acquire a majority stake in pan-Japan beauty salon franchise Agu Group’s KK Loiness and B-first KK for over $94.16 million (JPY10 billion).
CLSA announced on Friday that the acquisition will be done through its $400-million Sunrise Capital III, a Japan-dedicated private equity strategy that capitalises on opportunities in the mid-cap buyout sector.
According to an announcement, following the transaction, Sunrise III will acquire a majority stake in the Agu Group through a special purpose company. However, Kazuhiro Ichinose, the current shareholder and CEO of Agu Group, will maintain a shareholding in the company and
will remain the CEO.
The transaction is expected to close by late March 2018, it said.
Including both franchise and directly managed stores, the 2009-founded Agu Group currently has 271 beauty salons nationwide under the “Agu Hair Salon” brand. The group, which has nearly 300 salons across Japan, is targeting to grow the network to 1,000 salons nationwide. Despite fierce competition within the beauty salon industry, the company opened 100 new stores in 2017.
“Sunrise III intends to appoint three directors to the board of the company to proactively assist with franchise operations including the enhancement of administrative and planning functions as well as new salon launches, leveraging Sunrise III’s experience in retail store development and marketing,” CLSA said.
Meanwhile, this is the second acquisition within a month by Sunrise Capital III that earlier agreed to acquire Marubeni Mates Ltd, a full-suite service provider of uniforms in Japan, for an undisclosed amount.
Sunrise III, which was closed in May 2017 after being significantly oversubscribed, attracted investors from North America, Japan, Europe, the Middle East and Asia (ex-Japan).The fund’s predecessor Sunrise II is also currently investing.
CLSA Capital Partners, the asset management arm of CLSA, has more than $4 billion under management and offices across the region, including Hong Kong, Singapore and Tokyo.