SEAVI Advent Private Equity today announced that they have entered into a share subscription agreement with Showyu Group (the “Group”) for a total consideration of USD $20 million. The proceeds will be used for a planned M&A and pre-IPO restructuring activities.
Showyu Group, headquartered in Chengdu, is a national lifestyle and medical beauty chain that was founded in 2005. It operates in the People’s Republic of China as the largest self-owned provider of traditional beauty and non-surgical medical aesthetic services. Currently, the group directly owns and operates over 1,000 lifestyle beauty centres and over 20 non-surgical medical aesthetic centres through two respective business divisions: Showyu and Chunyu.
Prior to entering this arrangement, SEAVI Advent Private Equity conducted 2 years of monitoring of the Group. During this period, there were significant improvements both in industry outlook, and the Group’s corporate and governance structure. In the period from 2009 to 2014, the aesthetic medical sector grew from USD 2.8 billion to USD 5.5 billion, representing a CAGR of 14.5%. Meanwhile, the traditional beauty sector market size has grown stably over the past 5 years at a CAGR of 13%. The growth seen in these historical trends is expected to continue; the aesthetic medical and beauty sectors are slated for rapid growth in the near future as disposable income continues to rise for the 548 million and growing female population in China. According to Everbright securities, beauty expenses account for 20.9% of female white-collar consumption in China. As such, the aesthetic medical industry revenue is projected to reach USD 11.3 billion, representing a CAGR of 15.5% from 2014 to 2019.
Showyu Group is already moving in the right direction to capture this growth: Chunyu’s product focus on non-invasive and non-surgical procedures positions the Group well in the fastest growing sector of the industry. The Group’s position is further reinforced by Chunyu’s access to Showyu’s paying customer base of over 600,000 at little to no marketing cost.
Through this arrangement, SEAVI Advent Private Equity plans to support the Group’s top-tier management through the IPO process and to capitalize on their position in an industry with massive growth potential.