Holding Mergers and Acquisitions.

Author/Yang Jiyun

Report/Investment Community - M&A Frontline

Investment Community - M&A Frontline learned that L Catterton, the world's largest consumer goods private equity firm, announced that it has reached a cooperation with KKR and the Japanese beauty platform Ci FLAVORS Co., Ltd. (Ci FLAVORS), whereby a KKR subsidiary fund will acquire all the shares held by the existing shareholders of Ci FLAVORS.

This transaction is a 100% equity acquisition, and the transaction price has not been disclosed to the public.

Thus, this new consumer giant, which rose based on popular hair care products and transformed from a single product into a full-link beauty platform, has officially completed a new round of capital change. As one of the shareholders of Ci FLAVORS, L Catterton and other former investors will exit through this transaction.

KKR Acquires Japanese Beauty Leader

L Catterton Cashes In

The predecessor of Ci FLAVORS can be traced back to 2011.

At that time, the Japanese beauty market was solidified, with international brands occupying the high-end market, and local affordable beauty brands commonly fell into homogenization, with very few brands truly focusing on the real pain points of mass consumers for product development.

Aiming at the industry's gaps, Yusaku Horiuchi founded COSME COMPANY, rejecting the traditional beauty industry's research and development logic that emphasizes concepts over experiences, and adopting "defining products by user pain points" as its core strategy, starting with a light asset model to lay out the beauty track. To cater to the diversified brand incubation needs, the company successively established several subsidiaries such as ViCREA and Stella Seed, independently managing different positioned beauty product lines.

Soon, COSME COMPANY produced two major national hits in Japan—ViCREA's &honey honey hair care, which focuses on high natural ingredients, moisturizing repair, and high-quality packaging, hitting the needs of the young demographic for damaged hair from dyeing and seeking natural luxury in hair care, quickly gaining popularity through drugstore reputation and social media buzz, becoming a benchmark brand for over-the-counter hair care in Japan; followed by the launch of 8 THE THALASSO seaweed scalp care, which innovatively transferred the facial skincare barrier repair logic to the scalp care sector, focusing on sensitive scalp repair, igniting the market once again.

Since then, the company has firmly established itself in Japan's mid to low-end hair care market.

However, the model of relying on a single hit product and external supply chains has a significant development ceiling, and to transcend industry cycles, it is necessary to build a complete platform system for sustainable incubation, replication, and iteration of brands.

In August 2021, Yusaku Horiuchi officially established the holding entity Ci FLAVORS Co., Ltd., incorporating the original COSME COMPANY and its business ecosystem into the holding structure. In addition to self-owned brand incubation, Ci FLAVORS also began to layout a complete industrial platform including raw material procurement, packaging material research and development, production processing, offline direct sales, and online D2C.

Subsequently, the capitalization process accelerated, and private equity arrived. In 2022, global top-tier consumer goods PE firm L Catterton strategically invested in Ci FLAVORS, while a former core executive from LVMH Japan was appointed as a senior advisor to the group to establish an international governance system and connect global beauty resources for empowerment.

Ci FLAVORS initiated its acquisition journey, first buying Japanese beauty OEM manufacturers She Style and D2C digital operation company dr365. At the same time, it began to establish overseas subsidiaries in China and the United States, with its global footprint beginning to take shape.

To date, Ci FLAVORS has developed into one of Japan's leading beauty and lifestyle brand platforms, with products covering various fields including hair care, skincare, body care, and lifestyle. It owns multiple brands such as &honey, 8 THE THALASSO, unlabel, THERATIS, and MOROCCAN BEAUTY.

This time, KKR acquired all the shares held by the company's existing shareholders, with the sellers including L Catterton, Ci FLAVORS founder Yusaku Horiuchi, eBeauty Group, and Yanagi Capital Partners. After years of investment, all old shareholders achieved an exit return in one go.

Wave of Consumer Mergers and Acquisitions

Thus, another heavyweight transaction lands in the Asia-Pacific consumer M&A market.

For KKR, this investment is a key move to enhance its presence in the Asia-Pacific beauty sector and improve its global consumer industry layout, and is part of KKR's core strategy for private equity investment in Asia-Pacific.

KKR has a deep accumulation in the global consumer sector, with relevant investment cases including: global leading professional and retail beauty and hair care company Wella Company; leading beauty and health service platform Fresha; nationwide supermarket chain Seiyu in Japan; Asian lifestyle and health enterprise V3 Group, which owns brands such as TWG Tea and Bacha Coffee; and leading personal care enterprise Vini Cosmetics from India, among others.

In recent years, M&A transactions in the beauty sector have remained active—multinational corporations divesting non-core businesses, local quality platforms undergoing capital rotations, and regional brands integrating for overseas expansion have become mainstream trends in the industry.

For instance, in October 2025, luxury giant Kering Group sold its entire Kering Beauty division to L'Oréal for €4 billion, making it one of the largest divestitures in global beauty in recent years; in June of this year, Bain Capital took over the leading Japanese beauty company Fitline as CVC exited, continuing the classic path of "deep cultivation in the mature Japanese consumer beauty platform + PE takeover."

Although the overall heat of consumer investment in the primary market has cooled, leading consumer platforms with solid supply chains, continuous iteration capabilities, and global potential remain the core targets fiercely competed for by top-tier PE firms.

There have been numerous such cases in recent years.

From the domestic market alone, the most sensational was Starbucks reaching a strategic cooperation with Boyu Capital, selling 60% of its controlling stake in its China operations for a total price of $4 billion; shortly thereafter, CPE Yuanfeng and RBI Group announced the establishment of a joint venture "Burger King China," with CPE Yuanfeng holding 83%.

Additionally, Sequoia China acquired a majority stake in Italian luxury casual shoe brand Golden Goose; CPE Yuanfeng and European private equity firm Jacobs Capital signed a share purchase agreement to fully acquire Mammut Sports Group AG ("Mammut"); Bain Capital announced the acquisition of Gong Cha...

Behind the capital rotations lies a complete iteration of the investment logic in the consumer sector.

Global consumer brands are undergoing an asset reassessment, with PE firms now favoring mature core assets that are well-established, have good reputations, and possess mature business models over betting on unpredictable new brands. In addition, compared to the high premium acquisitions of their peak periods, current transaction costs are lower and entry-cost performance is higher.

For the party being acquired, the entry of international PE signifies a farewell to local growth bottlenecks, officially entering the competitive sequence of the global consumer sector.

Tides rise and fall.

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