Core Insights - In the summer of 2025, TPG sold Samhwa to KKR for 800 billion KRW (approximately 4.136 billion RMB), achieving nearly three times the investment return in less than two years, netting over 3 billion RMB [2][8] - Samhwa, established in 1977, evolved from a small workshop to a leading manufacturer in the Korean beauty packaging industry, known for its precision pump technology [4][6] - TPG's investment strategy involved identifying undervalued assets, implementing operational improvements, and optimizing business focus, which significantly enhanced Samhwa's value before the sale [8][7] Company Overview - Samhwa is recognized as one of the top three manufacturers of cosmetic containers and pumps in South Korea, with major clients including Estée Lauder, LVMH, L'Oréal, and Shiseido, contributing 58% of its sales [4][6] - The company gained the title of "Pump King" after securing a ten-year exclusive supply contract with Estée Lauder [4] Investment Strategy - TPG acquired 100% of Samhwa for 300 billion KRW (approximately 1.551 billion RMB) from the founding family and a private equity fund in November 2023 [4] - TPG's successful investment history includes notable cases such as the turnaround of Continental Airlines and Burger King, showcasing its ability to enhance operational efficiency and profitability [5][6] Operational Improvements - TPG implemented several operational changes at Samhwa, including reducing the number of low-margin SKUs from 1,200 to 400, optimizing global production capacity, and launching a digital customization platform called "PumpLab" [7][8] - The introduction of a new management team aimed to professionalize operations and decision-making processes, moving away from a family-run model [7] Financial Performance - Upon selling Samhwa, TPG not only received 800 billion KRW from the equity sale but also an additional 100 billion KRW in special dividends, resulting in a net gain of 600 billion KRW (approximately 3.1 billion RMB) [8] - The internal rate of return (IRR) for TPG's investment in Samhwa was approximately 75%, with a cash-on-cash return multiple (MOIC) of 3 times [8]

Group 1 - KKR plans to acquire South Korean cosmetics packaging company Samhwa for 800 billion KRW (approximately 4.16 billion RMB), marking a significant merger in the Asian market this year [1][6] - TPG, the seller, is set to make a substantial profit, having purchased Samhwa for about 1.5 billion RMB in 2023 and now selling it for a much higher valuation [1][5] - TPG's investment strategy involved significant operational improvements, leading to a nearly threefold increase in Samhwa's valuation within 20 months [2][7] Group 2 - Samhwa, originally a small plastic bottle cap workshop founded in 1977, evolved into a leading manufacturer of precision pumps for cosmetics, capturing a significant market share in South Korea [3][4] - The company has established long-term partnerships with major beauty brands, with nearly 60% of its sales coming from companies like L'Oréal, Estée Lauder, and LVMH [4] - TPG's acquisition strategy included streamlining product lines and enhancing production efficiency, resulting in a 38% reduction in labor costs and improved EBITDA margins [8][9] Group 3 - The buyout market is experiencing a resurgence, with private equity firms like KKR and Blackstone actively competing for high-potential assets, even amid global economic challenges [9][10] - Recent notable buyout transactions in China indicate a growing trend, with significant deals being completed by firms such as Sequoia China and Dehong Capital [11][12] - The complexity and high stakes of buyouts require not only successful acquisitions but also effective post-acquisition management to realize returns [12]

Core Viewpoint - KKR plans to acquire Samhwa, a prominent South Korean cosmetics packaging company, for 800 billion KRW (approximately 4.16 billion RMB), marking a significant merger in the Asian market this year [3][4]. Group 1: Company Overview - Samhwa started as a small plastic bottle cap workshop in 1977 and evolved into a leading manufacturer of cosmetic packaging, particularly known for its precision pumps [6]. - The company gained prominence by securing a 10-year exclusive global supply contract with Estée Lauder and currently generates nearly 60% of its sales from major beauty brands like L'Oréal and LVMH [6][7]. - TPG acquired 100% of Samhwa and its affiliates for approximately 300 billion KRW (about 1.557 billion RMB) in November 2023, initiating a series of management reforms that significantly increased the company's valuation [7][9]. Group 2: Investment Dynamics - TPG is set to earn around 900 billion KRW (approximately 4.653 billion RMB) from the sale to KKR, achieving a remarkable return in just 20 months [9][10]. - The valuation of Samhwa nearly tripled under TPG's management, highlighting the effectiveness of their operational strategies, which included streamlining product lines and enhancing production efficiency [10][11]. - TPG's approach involved focusing on high-margin precision pumps and automating production processes, resulting in a 38% reduction in labor costs and improved profit margins [10][11]. Group 3: Market Trends - The buyout market is experiencing a resurgence, with private equity firms actively pursuing undervalued assets, particularly in challenging economic conditions [12][14]. - Recent trends indicate a growing interest in buyouts, as evidenced by significant fundraising efforts from firms like EQT and Silver Lake Capital, which have raised substantial funds for acquisitions [12][13]. - The competitive landscape for buyouts is intensifying, with notable transactions occurring in both international and domestic markets, signaling a shift towards more aggressive investment strategies [12][13].