Affirma Capital sells Hwaseong-Nowcos package

Deal signed within a month of preferred bidder selection

Macquarie PE expands into K-beauty manufacturing infrastructure

Hwaseong Cosmetic's headquarters in Gimpo, Gyeonggi Province. [Hwaseong Cosmetic website]
Hwaseong Cosmetic's headquarters in Gimpo, Gyeonggi Province. [Hwaseong Cosmetic website]

Macquarie Asset Management's private equity arm (Macquarie PE) is set to acquire cosmetics manufacturers Hwaseong Cosmetic and Nowcos.

According to investment banking industry sources, Affirma Capital and Macquarie PE signed a share purchase agreement for the sale of cosmetics ODM and OEM companies Hwaseong Cosmetic and Nowcos on Friday. The deal closed within a month of Macquarie PE being named the preferred bidder last month.

The bidding process for Hwaseong Cosmetic, which kicked off in March, was fiercely contested. Five to six companies participated in the preliminary round alone. The final round drew a consortium of Korea Investment Private Equity and Ecopro Partners, as well as a European strategic investor, in addition to Macquarie PE. With the Hwaseong Cosmetic and Nowcos sale, Affirma Capital has now completed three successful exits this year — following Sungkyung Food and Seah ESAB — building a solid track record of returns. The firm is currently raising its seventh blind fund targeting 500 billion won ($362 million).

The deal reflects a broader shift in K-beauty investment away from brands and toward manufacturing and retail infrastructure. Global private equity funds have shown particularly strong appetite for the sector. KKR acquired cosmetics container manufacturer Samhwa for 730 billion won last year, and CVC Capital invested 300 billion won in K-beauty retail company Silicon2 in August.

Affirma Capital maximized the value of its portfolio companies through a bolt-on strategy of acquiring similar businesses.

The firm acquired a 70 percent stake from Hwaseong Cosmetic's founder in 2019, taking management control, and then bought Nowcos in 2022.

Hwaseong Cosmetic specializes in color cosmetics while Nowcos focuses on skincare — both operate as ODM companies. Hwaseong Cosmetic counts L'Oréal, Estée Lauder and domestic indie brands among its major clients.

Affirma Capital grew Hwaseong Cosmetic by ramping up research and development investment and marketing to overseas clients. Sales at the time of the 2019 acquisition stood at 50.1 billion won and rose roughly 2.2 times to 110.6 billion won last year. Operating profit jumped approximately 5.2 times over the same period, from 3.8 billion won to 19.8 billion won.

After acquiring Nowcos, Affirma Capital launched a tender offer in February for the remaining shares listed on the Konex market and voluntarily delisted the company. The move reduced the burden on potential acquirers of maintaining a stock listing, improving the chances of a successful sale.

Macquarie Asset Management, headquartered in Australia, is a global asset manager with a strong track record in infrastructure investment. In South Korea, it has invested in companies including DIG AirGas, LG CNS, S&I Corporation and Genuone Sciences. Having recently wrapped up several large-scale trillion-won deals, the firm is now accelerating new investments. Earlier this year it sold DIG AirGas to Air Liquide for around 4.85 trillion won and recovered 530 billion won by selling its entire remaining stake in LG CNS through a block deal.


park.jiyeong@heraldcorp.com