CJ Olive Young recruiting underwriters for an IPO in the H2 2022

CJ Olive Young Corp., South Korea’s dominant health and beauty store chain operator under CJ Group, has moved onto ready the process of an initial public offering on the main Kospi in the second half of 2022.

According to multiple sources from the investment bank industry on Tuesday, CJ Olive Young this week will send out request for proposal (RFP) to multiple brokerages at home and abroad to form a syndicate team. Lead advisors for the IPO are expected to be selected next month.

Although CJ Olive Young did not set a timetable for an IPO, industry insiders forecast that the company would go public in the second half of next year.

In March, the company drew pre-IPO funding from Glenwood Private Equity to strengthen online business and advance into overseas markets.

Glenwood PE acquired a 22.56 percent stake in CJ Olive Young for 414.1 billion won ($348.9 million) – 15.15 percent stake from CJ Group Chairman’s son Lee and related persons and 7.41 percent newly issued shares. Since the shares were purchased at 169,560 won apiece, the company’s valuation would have been estimated at 1.83 trillion won.

The company’s biggest shareholder is CJ Corp. with 51.15 percent ownership as of March. Lee Sun-ho, son of CJ Group Chairman Lee Jay-hyun and head of global business at CJ CheilJedang, owns 11.09 percent of the beauty store chain operator.

Market insiders presume CJ Olive Young is hastening IPO schedule because CJ Group owner and its owner family are hoping to improve the corporate value of CJ Olive Young. Upon IPO, the company’s target market capitalization is projected to reach between 2.5 trillion won and 3 trillion won, higher than the valuation estimated by Glenwood PE.

Last year, CJ Olive Young raised 100.1 billion won in operating income on sales of 1.87 trillion won.

CJ Olive Young – former health and beauty business unit under CJ Olive Networks – was spun off two years ago as a separate entity. It is currently Korea’s top player in the health and beauty store industry. The company commands about 80 percent in the country’s healthy and beauty store market based on the number of offline stores. It already had more than 1,000 offline stores in 2017 and has since been enhancing its online business as well. CJ Olive Young opened an official online mall and launched same-day shipping service for the first time in the industry and strengthened its omni-channel.

Shares of CJ closed Wednesday down 1.9 percent at 98,000 won, and those of CJ CheilJedang 1.44 percent lower at 410,500 won.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]