$1 Billion Acquisition of Chinese Cosmetics Packaging Supplier is Going on

100% of Chinese cosmetics packaging supplier HCP Group will be acquired by US-based private equity firm Carlyle Group. If the transaction amount can be completed, this may become the largest acquisition in the history of Chinese beauty.

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Recently, US-based private equity firm Carlyle Group (Carlyle) announced in a release that it has agreed to acquire 100% of Chinese cosmetics packaging supplier HCP Group from an affiliated fund of Baring Asia, with a proposed closing date of the third quarter of 2022. Details of the transaction have not been disclosed at this time.

However, as early as the middle of this month, some international media reported that Carlyle intends to acquire HCP for $1 billion and that Carlyle and Baring Asia, the owner of HCP, have finalized the final details of the acquisition agreement.

According to public reports, if the transaction amount is true, this may become the largest acquisition in the history of Chinese beauty.

Public reports show that HCP was founded in 1960 in Taiwan, China, and has a history of more than 60 years so far. It designs, develops and manufactures primary packaging containers mainly for the color cosmetics, skin care, fragrance and toiletries industries, and is currently the largest color cosmetics packager in Asia and one of the largest cosmetic packaging suppliers in the world.

According to the information on HCP's official website, it has 10 production sites in China, the United States, Mexico and Europe, including five factories in China. At present, HCP has cooperated with more than 250 global famous cosmetic and perfume brands, covering international top brands such as Estee Lauder, L'Oreal and Shiseido, as well as Chinese brands such as Florasis, Perfect Diary and Meiking.

Specifically, in terms of cooperation with brands, HCP provides more than 500 individual items of cosmetic packaging materials, such as compact powder boxes, palettes and kits, lipsticks, mascaras, etc. In addition, it also provides custom packaging design and manufacturing services for brands. Its cases include "Givenchy Blush" and "Mao Gopin's Palace Collection".

Carlyle will leverage its experience in the consumer and manufacturing industries to help HCP continue to expand its business and customer base globally. Carlyle will also leverage its global investment network in the beauty, consumer and manufacturing industries to help HCP explore strategic global acquisitions, further strengthen the company's advanced research and development capabilities, and promote business synergies and strategic alliances.

HCP has experienced transformative growth during Baring Asia's ownership period. With Baring Asia's support, HCP became an increasingly strong primary packaging supplier for color cosmetics and skin care products, and expanded its product technology and business footprint.

"We are proud to be the world's leading manufacturer of cosmetic packaging and thank Baring Asia for their support over the past six and a half years," said HCP President and CEO. We will continue to focus on our strategic focus of sustainable packaging technology innovation to provide the highest quality service and best-in-class operations to our global customers. It is a pleasure to partner with Carlyle and it is an honor to have such an exceptional shareholder. We look forward to leveraging the strength of Carlyle's global platform to achieve the next phase of growth and enhance our leading position in the international market."

Managing Directors of Carlyle's Asia investment team, said, "We are excited to partner with HCP and look forward to working with HCP President and CEO and the management team to help the company achieve its next phase of global expansion. We see long-term growth potential in the beauty industry and see HCP's strong track record and the company's strong commitment to R&D and environmental, social and corporate governance (ESG) as differentiators. Carlyle will leverage our global platform, deep industry and market knowledge, and synergies with our portfolio companies across consumer and manufacturing industries to help HCP capture new growth opportunities and help the company move to the next level."

"We are proud to have supported the company's growth as a global packaging leader during our partnership with HCP," said Managing Director of Baring Asia. "We are confident in the company's long-term sustainable growth by exploring new markets, deepening our presence in the local Chinese market, and making selective complementary acquisitions to enrich the company's product line. We are proud to witness HCP's transformative developments in ESG The transaction is subject to relevant regulatory approvals and is expected to close in the third quarter of 2022, and sustainability, including recyclable recycled content (PCR) packaging and sustainability-certified manufacturing facilities that will leave a more sustainable and environmentally friendly footprint in the future. "