Aureos South East Asia Fund II has completed a USUSD7m deal acquiring a third of HBC Inc, a cosmetics retailer in the Philippines.
Aureos Capital is a private equity fund management company specialising in investing in small and medium sized businesses in emerging markets.
HBC is the Philippines’ largest chain of stores dedicated to selling in-house branded cosmetics and beauty products, with 197 stores in the Philippines, nine local franchise stores and three foreign franchise stores in the USA and Bahrain.
The Philippine cosmetics industry is fast-growing, registering an average growth rate of 7% per year. HBC have been at the forefront of this growth, registering double digit sales growth figures for the last three years.
ASEAF II, which is currently fundraising with a target of USUSD200m, is a regional private equity fund focusing on investments in South East Asia, particularly Indonesia, Thailand, Vietnam, the Philippines and Malaysia. Aureos has offices in all five countries, as well as Singapore, staffed by senior investment teams with extensive regional private equity experience.
Aureos’ investment enabled HBC to expand and diversify through the acquisition of a convenience-format healthcare chain, the 55-outlet drugstore chain Save More Drug Store. Save More sells pharmaceutical products and groceries alongside cosmetics and health products. The acquisition added new outlets for HBC’s branded goods and opportunities to increase sales and create synergies through the integration of operational and support functions.
Danny Lizares (pictured), Partner in Aureos’ Philippines office, says: “HBC is a leading player in the Philippine health and beauty industry, and is enjoying sales growth outpacing its competitors in a fast-growing market as it focuses on its core values of providing affordable high quality products for a broader mass market which is the C and D category”.
Noel Manucom, President of HBC, says: ‘We are delighted to be working closely with Aureos. Along with their investment, the team brings an excellent track record in helping businesses to the next stage in their development. Their support will be crucial in unleashing the full potential of our acquisition of Save More Drug and reaching our target of expanding our retail network and build enough scale to be very attractive for a public offering in the next 3 to 4 years."
