이 기사는 2021년 10월 08일 07:33 thebell 에 표출된 기사입니다.

South Korea’s facial mask producer L&P Cosmetic is gearing up to raise money in a pre-initial public offering (IPO) round as the company swung to a profit.

L&P Cosmetic started a pre-IPO capital raise in the first half of this year, according to investment banking industry sources. The company tapped several private equity (PE) firms and is reportedly in advanced talks with some of them, with Eugene PE mentioned as the strongest candidate.

Established in 2009, L&P Cosmetic owns cosmetics brands, including Mediheal, Makeheal, and Eyecrown. The company is the largest facial mask manufacturer in Korea thanks to Mediheal’s popularity in the Chinese market.

Credit Suisse invested 40 billion won ($33 million) in L&P Cosmetic in 2018, valuing the company at 1.2 trillion won. The global investment bank currently holds a 3.49% stake in L&P Cosmetic.

However, the company’s revenue dropped by 40% to 234.8 billion won in 2019 after reaching a record high at 401.5 billion won in 2016 amid the deteriorating facial mask market. It swung to an operating loss of 13.4 billion won from an operating profit of 102.1 billion won during the same period. The company had to cancel its plan to go public in 2019.

Last year, L&P Cosmetic successfully made a turnaround as it drastically reduced
selling, general and administrative expenses and its organic cosmetics brand Manyo Factory, which it acquired in 2018, gained popularity. The company expects its financial performance to improve in the post-Covid-19 era.

“L&P Cosmetics repeatedly failed its attempts to sell itself or raise funds in the capital market as it sought high valuation,” said an industry source. “I understand that the company is trying to raise funds this year by significantly lowering its expectations.” (Reporting by Se-hun Jo)