이 기사는 2019년 12월 31일 08:00 thebell 에 표출된 기사입니다.

Private equity (PE) firm Texas Pacific Group (TPG) has acquired South Korean dietary supplement manufacturer Health Balance.

According to investment banking (IB) sources on December 24, TPG bought 100 percent of Health Balance from Seoul-based PE house Anchor Equity Partners. Health Balance has grown its size on active bolt-on acquisitions.

Health Balance started out as a Korean ginseng-based supplement company CheonJiYang. Anchor Equity had acquired 100 percent of CheonJiYang 2012. Two years later the PE firm acquired baby food brand Alvins and health food distribution firm Health Balance. Anchor Equity has diversified its portfolio by acquiring fast-growing healthcare companies to offset some of negative effects of the stagnant Korean ginseng industry.

Thanks to bold-on acquisitions, Health Balance has become dietary supplement manufacture, which produces a wide range of products from Korean-ginseng to baby foods.

According to Korea Health Supplements Association (KHSA) data, South Korea’s health supplements market size has grown from 3.5 trillion won in 2016 to 4.2 trillion won in 2018. The market size is expected to reach 4.58 trillion won this year. On the back of the market growth, Health Balance’s earnings before interest, taxes, depreciation and amortization (EBITDA) is expected to exceed 28 billion won this year, compared to 15.9 billion won in 2018.

The dietary supplement manufacturer is expected to expand its footprints to overseas markets. It is said Health Balance has recently organized a team to enter the Chinese market. The PE giant TPG’s China office is likely to help Health Balance’s entry into the market directly and indirectly.

The Chinese dietary supplements market is five times bigger than the Korean market. KHSA expects the size of the Chinese dietary supplements market to be 24 trillion won in 2020. China’s consumption of dietary supplements is growing due to outbreaks of diseases like SARS and bird flu. Chinese also tend to prefer foreign food and beverage brands because of their distrust of local brands. Many South Korean companies have already flocked to the Chinese market.

“A widespread distrust of foods in China makes favorable environment for Korean brands to run their business there. TPG, which has strong global networks, is expected to help Health Balance enter the Chinese market to raise its enterprise valuation,” said an industry source.

(By reporter Jo Se-hun)