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Cosmax lays foundation for further growth with Nu-World deal
Posted on Monday, 13 November 2017 13:01
South Korean cosmetics manufacturer Cosmax is acquiring US rival Nu-World Beauty for roughly USD 50.00 million through a soon-to-be-established local joint venture company.

Zephyr, the M&A database published by Bureau van Dijk, shows there have already been a couple of cross-border deals involving these two countries announced within the sector so far this calendar year.

According to Zephyr, South Korean aesthetic device maker Classys said it would buy New York-based Skederm, while in August product development contract manufacturer Englewood Lab said it would absorb wholly-owned, New Jersey-based Englewood Lab LLC.

Obviously, this time round, the South Korean suitor intends to carry out the deal in the US through a newly-established subsidiary in what would be its second acquisition in the States within the last four years.

Cosmax will own 50.0 per cent of this joint venture, tentatively named Cosmax West, while its founder and president, and group affiliate NutriBiotech, will control the balance.

This special purpose acquisition vehicle will then take over Nu-World, billed as the third-largest manufacturer of cosmetics products, such as make-up, fragrances and nail colour, in the US.

It reportedly expects to book a 10.0 per cent increase in annual sales from USD 105.00 million last year.

Cosmax is using the deal to ramp up its footprint in North America; Pulse by Maeil Business News noted the two would have a leading position in US’ cosmetic original development manufacturing (ODM) market and have a diversified business model.

An unnamed official told the English news website Cosmax plans to boost the efficiency of its overseas production to secure customers both in the US and in Europe.

This is part of its long-term goal of reaching sales of KRW 3,000 billion (USD 2.70 billion) by 2020 and becoming the world’s biggest cosmetics ODM player by annual manufacturing capacity of over 1.60 billion in 2017, Pulse added.

© Zephus Ltd