Cosmetics company FANCL acquired by Kirin for $2.4b
Kirin Holdings has successfully completed its tender offer for FANCL Corporation, securing a 75.24% ownership stake. This move is part of Kirin's strategy to become a leading health science company in the Asia-Pacific region.
Transaction snapshot
Deal value: $2.44 billion
Deal multiples: 2.1x revenue, 18.3x EBITDA
Deal type: Acquisition
Investors: Kirin Holdings
This move follows Kirin's previous acquisition of Blackmores, as the brewing giant diversifies amid a shrinking domestic beer market. Kirin isn’t new to the scene, having acquired approximately 33% of FANCL’s shares five years ago.
FANCL, known for its cosmetics and health supplements, generates about 90% of its business from skin care products. The company also produces Food with Function Claims (FFC) items, available in Japan and Singapore.
Roughly 70% of FANCL's sales come from direct-to-consumer (D2C) channels, both online and offline. Kirin values FANCL's ability to connect with consumers through these D2C channels and its product development approach using customer feedback.
Kirin expects its health science segment to contribute about 8% to its overall business after acquiring FANCL. In its last financial year, FANCL recorded revenue of $1.18 billion and an operating profit of $133.6 million.
The deal aligns with Kirin's long-term goal of achieving $5.3 billion in health science business revenue.
Kirin sees potential synergies in combining FANCL's skin care expertise with its own health foods, possibly incorporating its existing biotechnology into external skin care products.
Japan's domestic skin care market, worth about $87.4 billion, slightly exceeds its $67.2 billion supplement market. Kirin aims to grow sales by promoting the combined benefits of skin care and 'immune care'.
Blackmores, an Australian-origin company, came under Kirin's ownership about a year ago. Kirin had hoped to leverage Blackmores' strong presence in the Asia-Pacific region through this acquisition. The company sees potential synergies in selling FANCL health products through Blackmores' APAC channels, which could introduce more FANCL products to overseas markets. However, these plans are not yet finalised.
Alastair Symington, CEO of Blackmores, expressed support for Kirin's vision, stating that the acquisition of FANCL is a key step in connecting more consumers to the best possible health solutions. The combination of Kirin's R&D strengths, FANCL's expertise in skin and health products, and Blackmores' naturopathic heritage could create a powerful portfolio in the health science sector.
