Bain Capital sells 6% stake in Korea’s Classys via block deal for $163 million

Bain Capital LP has offloaded a 6% stake in South Korean medical aesthetics company Classys Inc. through a block trade, raising 228 billion won ($163 million) as the US private investment firm scaled back its position after a stalled exit attempt.

Classys said in a regulatory filing on Friday that Bain Capital, its largest shareholder, sold 3.93 million shares at 57,915 won apiece, representing a 10.9% discount to Classys’ closing price on Thursday.

The transaction reduced Bain’s holding in the Kosdaq-listed company to 54.16% from 60.16%, according to the filing.

The deal marks a partial retreat after Bain’s earlier effort to sell control of the company failed to attract sufficient investor interest.

Last October, the Boston-based buyout firm appointed JPMorgan and Citigroup Global Markets Inc. as advisors to explore a sale of its entire stake, but potential buyers balked at the valuation, industry sources said.

LUKEWARM APPETITE FOR FULL BUYOUT

Sources said Bain’s block sale reflects a pivot toward recovering some of its capital in the face of lukewarm appetite for a full buyout.

“There has been limited interest at the asking price for a full acquisition,” said a Seoul-based banker familiar with the matter. “The block trade allows Bain to reduce exposure while still maintaining control.”

In early Monday trade, shares of Classys were down 0.7% at 60,050 won versus the Kosdaq index’s 1.6% fall.

Classys, founded in 2007, is known for the beauty device Shurink Universe, which uses high-intensity focused ultrasound (HIFU) for skin tightening. The company is the unrivaled leader in the Korean HIFU treatment device market, controlling more than 55% of the segment.

Bain bought a majority stake in Classys for 670 billion won in 2022.

The partial divestment underscores the challenges faced by global private equity firms in exiting their investments in Korea, where a valuation gap and weak M&A sentiment have hampered deal activity in recent months.

Korean private equity firms are also said to be reluctant to acquire full control of Classys in the aftermath of MBK Partners Ltd.’s handling of Homeplus Co., a Korean retailer that filed for court receivership, sources said.

In late March, global private equity giants such as KKR & Co., the Carlyle Group and Hillhouse Capital Group Holdings Ltd. showed interest in acquiring a stake in Classys, sources said.

Write to Jong-Kwan Park at pjk@hankyung.com
In-Soo Nam edited this article.