A vehicle backed by the Singapore private equity firm KV Asia Capital and global asset managers Hermes GPE and Adams Street has acquired a 25% stake in Indonesia-listed personal care brand Victoria Care.
The entity, Beauty Brands International, picked up the stake on Sept. 29 from Victoria Care’s promoter PT. Sukses Sejati Sejahtera for 613 trillion rupiah ($43 million), shows a filing by the company with the Indonesia Stock Exchange (IDX).
Beauty Brands, a Singapore-registered entity, is majority-owned (57%) by KV Asia. Hermes holds a 25.75% stake in the vehicle, while Adams Street Partners owns the rest, shows data from Singapore’s Accounting and Corporate Regulatory Authority (ACRA).
When contacted, KV Asia confirmed the investment in Victoria Care — its first in Indonesia.
Victoria Care is listed on the Indonesia Stock Exchange (IDX) since December 2020 and had a market capitalisation of 2.72 trillion rupiah ($190 million) as of Oct. 12.
IDX filings show PT. Sukses Sejati Sejahtera divested 1.677 billion shares of Victoria at 366 rupiah apiece, diluting its stake to around 60% from 85% earlier. Around 15% of the company is owned by the public.
Mass market brand
Founded in 2006, Victoria Care is a beauty and personal care manufacturer and distributor that targets the mass market.
Its brands — Miranda, Herborist, Victoria, Sixsence, Iria, CBD and Secret Clean that cover the haircare, body care, and other antiseptic segments — are marketed as “value-for-money” items. Its products include body scrub, body butter, olive oil, lotion, soap, facial mask, hair vitamin, hair colour, and shampoo.
The company claims that most of its products are Halal certified.
Victoria Care has an Indonesia-wide presence at more than 70,000 outlets across both traditional and modern trade formats.
In 2020, the company reported revenues of 1.046 trillion rupiah ($74 million), up 30% from 800 billion rupiah in 2019. Its profits, meanwhile, grew 33% to 148 billion rupiah in 2020, from 111 billion rupiah in 2019.
“This company [Victoria Care] has outperformed its peers significantly during the pandemic,” noted Ludi Mahadi, the Indonesia market head at KV Asia Capital, adding the PE firm expects to seal more investments in Indonesia in the next few months. “KV Asia Capital is looking to invest in good businesses with good management, and in sectors with strong growth.”
KV Asia makes equity investments in mid-sized companies across Southeast Asia. The firm was launched by Karam Butalia, the former global head of Standard Chartered Private Equity (SCPE), and Vibhav Panandiker, previously of SCPE and JP Morgan Private Capital Asia in 2010.
It recently secured a $100 million first close of its second fund, which has a total target of $300 million. The company hopes to seal the final close of the fund by the end of 2021 or early 2022, DealStreetAsia had reported in June. KV Asia Capital Fund II is targeting mid-market investments with a ticket size of $20-100 million in sectors like consumer, services, and manufacturing.
The firm’s first vehicle, which closed in late 2013, had exceeded its $250 million target after garnering commitments from pension funds, endowments, financial institutions, fund of funds, and family offices. KV Asia Capital is reportedly seeking to exit a few investments made from its first fund.
For instance, KV Asia is pursuing a sale process for the Malaysian supplement maker DXN Holdings Bhd. KV Asia Capital holds around 25% in DXN Holdings and is being advised by Morgan Stanley on the deal, per an earlier report by DealStreetAsia.
The PE firm had exited its investment in Malaysian hypermarket TF Value-Mart at the end of 2020. KV Asia Capital, together with local and international partners, had acquired a controlling interest in TF Value-Mart in 2016. The investment was made from its first fund.
In May 2019, KV Asia sold the K-12 education institution Asia Pacific School (APS) to the International Schools Partnerships (ISP). APS was part of Malaysia’s tertiary education business, APIIT Group, which was acquired by KV Asia in December 2017, according to the company’s website.
The PE firm took over APIIT from Malaysia’s state-owned private equity firm Ekuinas Nasional Bhd, which divested its entire stake for $180 million. In 2017, KV Asia had scored two exits with the sale of Singapore’s Orange Valley Healthcare (OVH) to Singapore Press Holdings Limited (SPH) for S$164 million. It also divested its holding in Singapore’s Aalst Chocolate. Founded in 2010, KV Asia Capital focuses on investing in mid-sized companies in Southeast Asia.
According to a report last year by the global research firm Euromonitor, Indonesia’s beauty and personal care market is estimated to grow to $8.46 billion in 2022 from $6.03 billion in 2019. This is attracting investor interest in the segment, according to an analysis of the sector by DealStreetAsia last year.