In a statement, New Horizon said it has acquired the 100 per cent stake in Kagayaku from Ant Capital Partners, which bought the Japan-based cosmetics producer in 2016. The firm said the acquisition was made through its third fund, NH-3.
Following the acquisition, New Horizon said Yukio Matsuki will continue to serve as Kagayaku’s president. The firm will also appoint new outside directors and corporate auditors to form the cosmetic firm’s organisational structure.
Founded in 2007, Kagayaku Cosmetics sells cosmetics, detergents, and toiletry products. Formerly known as Sojitz Cosmetics, the Osaka-headquartered offers skincare, makeup, body care, oral care, and hair care products.
New Horizon said it has chosen to acquire Kagayaku because it sees the company’s further growth through the development of the new market and expanding its long-established relationship with consumers.
New Horizon Capital is a top-tier Japanese PE fund targeting small- to mid-cap buyout deals, with approximately 17 years of experience and cumulative assets under management of ¥270 billion ($2.5 billion).
The PE firm, which was spun off from Phoenix Capital, has been managing three funds since its foundation and nine funds in total as Phoenix Capital and New Horizon.
New Horizon’s acquisition of Kagayaku comes as Japan’s cosmetics market is anticipated to grow at a compounded annual growth rate of 3.41 per cent until 2025 to $45.64 billion. In 2017, Japan’s cosmetics market reached nearly $24.37 billion, according to Goldstein Research.
In March, US global alternative asset manager Carlyle Group agreed to invest in Japanese cosmetics firm Tokiwa Corporation. Financial details were not disclosed but Carlyle said the equity for the transaction will come from Carlyle Japan Partners III, the group’s third buyout fund in Japan.
Established in 1948, Tokiwa is engaged in the research, development, and manufacturing of cosmetic products. It boasts more than 400 patents and is a supplier to beauty brands around the world.
Last year, US healthcare conglomerate Johnson & Johnson acquired all outstanding shares of Japanese skincare firm Ci:z Holdings Co Ltd that it does not already own for ¥230 billion ($2.05 billion) in cash. The deal gives the American company ownership of the Japanese firm’s popular brands such as Dr.Ci:Labo, Labo Labo and Genomer line of skincare products, will help it strengthen its international innovation pipeline.