BDA Partners among top advisors, as Korean M&A rebounds

Korea’s M&A market showed encouraging signs of recovery during 3Q24, with optimism surrounding potential interest rate cuts and restructuring efforts from large conglomerates driving increased deal activity. PE funds aggressively pursued M&A opportunities, which led to a notable rise in high-value transactions. Five deals exceeded KRW1 trillion (US$750m) in 3Q24, compared to just one in 1H24.

Among the highest profile transactions during this period was the KRW2 trillion (US$1.5b) acquisition of Ecorbit, underscoring Korea’s active deal environment. BDA Partners played a key role in the transaction, advising the buyer, IMM Consortium, working across the table from UBS and Citi. This involvement has led BDA Partners to secure its place near the top of the M&A league tables for corporate acquisitions with a total transaction value of KRW 2.07 trillion in 3Q24.

This surge in large-scale deals reflects growing confidence in the market, as both local and international players capitalise on the improving financial advisory landscape. With interest rates expected to decline, even more M&A opportunities are likely to emerge, particularly in sectors such as waste management and semiconductors. BDA Partners, with its extensive experience, is well-positioned to navigate high-value transactions, as the market outlook remains positive.

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Many global multinationals are divesting their Chinese assets because of geopolitical tensions.

BDA Partners has developed expertise in finding buyers, often local Chinese financial sponsors or corporates, to acquire these assets.

If you are considering divesting anything in China, please speak with us to learn what options may be possible.

Here are some examples of Chinese divestitures we have managed:

China MNC Divestitures Credentials

The global fertility services market is expected to grow at a robust CAGR of 7% over the next decade, driven by an aging global population, rising infertility rates, and couples delaying childbirth. Market demand tailwinds are even more pronounced in Asia and the fertility market ecosystem is relatively nascent compared to the West. Asia Pacific market is expected to grow at a CAGR of 10% over the next 10-years, significantly outpacing global growth. Scaled regional players have started to emerge and are looking to consolidate the highly fragmented market, taking advantage of scale economies, leveraging regulatory differences across markets, sharing of best practices, clinic expertise and technology to drive better patient outcomes / success rates.

The fertility services market has attracted significant interest from both strategic and financial investors seeking to build regional platforms:

• The business model has attractive characteristics such as high barriers to entry (due to license requirements, brand reputation, access to talent, clinical expertise / ability to achieve high success rates), robust EBITDA margins and low capital intensity relative to hospitals
• SE Asia has been a particular focus for global investors due to the high fragmentation of providers and large under-served populations with growing local demand for fertility services
• India has also attracted strong interest as the IVF sector is expected to grow at a CAGR of 16% over the next 10 years, and scaled players have emerged with the backing of financial sponsors

In the next five years, we expect significant M&A activity in the fertility services sector across Asia, with a particular acceleration in SEA and India as several large players establish their dominant positions in the region.

Please reach out to BDA Partners for a discussion regarding specific IVF M&A / investment opportunities.

Download the full report for more insights regarding the IVF sector landscape in Asia.

Since the start of 2024, we have seen a strong upturn in M&A after a challenging year. BDA’s pipeline and sector expertise have continued to grow. We have published many insight pieces from our sector heads within Consumer & Retail, Health and Technology this year. Please join our mailing list to read our latest insights and reach out to BDA Partners for a discussion regarding specific M&A opportunities. 

North Asian countries already comprise the world’s largest markets for beauty and personal care products. China, Korea and Japan together represent 35% of the global market, with above average growth. China skyrocketed to become the industry leader in this region, but has witnessed a troubling market hangover in the last 12 months.

Asia Pacific’s luxury beauty segment – especially China – face the challenge of justifying high prices to increasingly sophisticated and discerning consumers, against a backdrop of economic uncertainty and rising quality and quantity of brands at more accessible price points. At the same time, younger women – and men – are spending more each year.

North America makes up 25% of the global market, while Europe makes up 20%. And those regions are increasingly looking to Asia for innovation and growth.

Asian beauty brands have recovered from the pandemic, and are jostling to find new, compelling ways to connect with consumers. Beauty influencers and DTC brands are both driving and adapting to buyer preferences.

In the past, people would buy beauty brands landed in China purely because they were ‘Made in France’ or ‘Made in Switzerland’. Suddenly now, Asian consumers are rediscovering and appreciating their own rich cultural backgrounds and ancient beauty practices.

This swelling national pride has encouraged new Chinese domestic labels to engage in premium-isation, to offer more interesting propositions, drawing on home advantage. Compared to international peers, they have innovated faster and shown themselves to be adaptable and responsive to local consumer trends. International brands are finding it increasingly hard to grow market share, unless they speak to local preferences.

L’Oréal remains the leading global beauty products company, with US$40bn in global sales, double the size of second-place Unilever. Rounding out the top five are Estée Lauder, P&G and the Japanese giant: Shiseido. All of these are fighting to find growth across Asia, although Estée’s big bets on China have mostly misfired.

Once the domain of Western beauty leaders, the cosmetics industry across Asia is now booming, at least outside China, blending Eastern and Western elements. Rising disposable income and evolving lifestyles drive this growth, marking the beauty industry as one of the most radiant and lucrative consumer segments.

BDA’s latest Insight report shows that:

• Skincare continues to be a dominant force in Asia
• Indian beauty is experiencing rapid growth, projected to reach US$33bn by 2027, with a CAGR of over 6%
• Thailand’s beauty industry is growing and bifurcating, with both mass and premium brands performing well
• Prominent Asian beauty companies are pursuing ambitious regional expansion across India, Thailand and Vietnam, accelerating expansion into secondary Asia Pacific markets

Younger emerging Western beauty leaders such as Kylie Cosmetics and Fenty Beauty are debuting in India, China and SE Asia to widen their consumer base.

The market is evolving and shifting fast. BDA is carefully monitoring these market dynamics, working on multiple transactions in the space. We’ve closed a number of exciting beauty transactions. We’re seeing strong dealflow. Let us know if we can help you.

GP-led secondaries have become a more attractive, alternative, path to liquidity amid a challenging exit environment for sponsors during the past two years. While APAC markets still lag behind their Western counterparts in terms of utilising this type of transaction, recent completed transactions have been encouraging.

In BDA’s latest insight piece, we share our key thoughts on the Asian GP-Led secondaries landscape:

• Continuation Fund transactions, established in the US and Europe, are growing in Asia, with notable activity in Japan, India, China and SE Asia
• Market volatility and challenging exits are driving more sponsors to the secondaries market
• Secondary investors prioritise GP-alignment, growth and resilience; however macro-economic and political uncertainties, particularly in China, have lead to a pricing gap and a more cautious investment
• Secondary funds “dry powder” remains high and investors are focusing on well-performing assets, strong GP-alignment and recession resilience

Download the full report for more insights on the Asian GP-led secondaries

For a decade, China has been the engine for global luxury growth. China now accounts for 25% of global luxury spending, but this year, China’s growth has slowed to a trickle.

India today is a much smaller luxury market, representing 5% of global luxury spend, but it’s suddenly seeing explosive growth.

GDP growth, 8.2% in 2023, lit the touch paper. Next: the fireworks.

India is the fastest-growing major global economy. Political reform and a fast-growing, hyper-aspirational, young middle-class are driving India toward being the third largest consumer market globally.

The luxury and ultra-luxury sectors, across real estate, hospitality, apparel, accessories and automotive, are witnessing phenomenal growth. In BDA’s latest insight piece, we analyse the tremendous growth of luxury in India.

• India successfully rebounded from the disruptions of COVID-19 to emerge as the fastest-growing major economy
• By 2030, 25% of India’s population will be aged between 20 and 33, positioning India as the largest “young consumer market” globally
• The credit landscape has significantly shifted towards “buy now, pay later”, driven by an expanding ecosystem and increased discretionary spending
• The Reserve Bank of India is enhancing credit accessibility in underserved sectors such as agriculture, small and medium enterprises and housing
• India as a global tech hub has driven widespread adoption of digital payments, online shopping and social media engagement, prompting local companies to integrate new technologies to cater to evolving consumer demands
• India’s luxury market is set to more than triple by 2030, driven by a growing consumer base and increasing wealth, particularly from high-net-worth individuals
• India’s burgeoning high-end market is attracting global brands and incubating local luxury too 

Download the full report for more insights on the luxury sector in India

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About BDA Partners

BDA Partners is the global investment banking advisor for Asia. We are a premium provider of Asia-related advice to sophisticated clients globally, with over 25 years’ experience advising on cross-border M&A, capital raising, and financial restructuring. We provide global reach with our teams in New York and London, and true regional depth through our seven Asian offices in Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul and Tokyo. BDA has deep expertise in the Chemicals, Consumer & Retail, Health, Industrials, Services, Sustainability and Technology sectors. We work relentlessly to earn our clients’ trust by delivering insightful advice and outstanding outcomes.

BDA Partners has strategic partnerships with William Blair, a premier global investment banking business, and with DBJ (Development Bank of Japan), a Japanese Government-owned bank with US$150bn of assets.

US securities transactions are performed by BDA Partners’ affiliate, BDA Advisors Inc, a broker-dealer registered with the Securities and Exchange Commission (SEC). BDA Advisors Inc is a member of the Financial Industry Regulatory Authority (FINRA) and SIPC. In the UK, BDA Partners is authorized and regulated by the Financial Conduct Authority (FCA). In Hong Kong, BDA Partners (HK) Ltd is licensed and regulated by the Securities & Futures Commission (SFC) to conduct Type 1 and Type 4 regulated activities to professional investors. www.bdapartners.com  

Underpinned by continued digitalisation, rapid adoption of localised, cloud-native mission-critical Software, attractive demographics and other market tailwinds, Asian Software is set to outpace Global Software growth, reaching ~20% share of the Global Software market by 2028.

In our latest insight piece, we summarise our key observations on the Asian Software landscape:

• Scaled Software companies have proven operating leverage, and demonstrated accelerating cash flow generating ability
• Emerging technologies such as AI are expected to drive continued expenditure on Software
• Software founders and management teams are increasingly tracking non-traditional SaaS-oriented metrics to meet the needs of savvy investors
• Many traditional non-Software companies have become Software companies as they undertake such strategic M&As to remain relevant and competitive
• Emergence of local champions driven by the heterogeneous nature of the Asian markets, with differing stages of development and diverse languages and cultures

Download the full report for more insights regarding Software in Asia. 

In China’s dynamic healthcare market, M&A activities are booming due to an ageing population and increasing consumer health demands. The sector is seeing heavy domestic investments from Chinese firms and Government funds. PE firms are seizing M&A opportunities amid capital raising challenges. Chinese companies are also eyeing cross-border M&A for tech-driven healthcare targets. The market outlook indicates industry reshuffles, rising demands for elderly care and consumer health, and flexible growth strategies by multinational firms.

Investment trends highlight a focus on resilient segments, surging investment in out-of-pocket payment sectors and Chinese firms expanding globally, particularly across SE Asia and the Middle East. European healthcare companies remain attractive for Chinese investors; licensing deals are on the rise, led by Chinese pharma firms. 

In our latest Insights piece, we summarise the predicted outlook of China healthcare M&A for 2024:

• Domestic strategics, Government-backed funds and RMB funds are investing heavily in China’s healthcare market
• There is an increasing difficulty for companies looking to raise capital in private or public markets, leading to M&A opportunities for large-cap PEs
• Support from the Chinese government to grow the private healthcare sector, including the development of private hospitals and elderly and home care services
• Narrowing valuation gap between IPO and trade sale facilitates more M&A deal completions

Download the full report for more Insights regarding the Chinese healthcare sector.

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About BDA Partners

BDA Partners is the global investment banking advisor for Asia. We are a premium provider of Asia-related advice to sophisticated clients globally, with over 25 years’ experience advising on cross-border M&A, capital raising, and financial restructuring. We provide global reach with our teams in New York and London, and true regional depth through our seven Asian offices in Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul, and Tokyo. BDA has deep expertise in the Chemicals, Consumer & Retail, Health, Industrials, Services, Sustainability and Technology sectors. We work relentlessly to earn our clients’ trust by delivering insightful advice and outstanding outcomes.

BDA Partners has strategic partnerships with William Blair, a premier global investment banking business, and with DBJ (Development Bank of Japan), a Japanese Government-owned bank with US$150bn of assets. bdapartners.com

The HealthTech industry has seen substantial expansion in recent years, largely propelled by the widespread acceptance of digital healthcare services. The COVID-19 pandemic has brought about a shift in people’s attitudes, resulting in increased confidence in virtual healthcare delivery and a noticeable increase in participation by service providers, a trend that has been historically low. In our latest insight piece, we summarise the global HealthTech sector landscape.

• Global HealthTech sector continues to experience strong growth with a total market size of US$860bn+ in 2022, expected to grow at a 15% CAGR to 2028
• COVID-19 disrupted the healthcare industry with HealthTech being the most direct beneficiary with an increase in both user and provider adoption
• Healthcare eCommerce continues to be the path to monetisation, however, more companies are now adding digital health services to provide holistic offerings
• Revenue Cycle Management (RCM) is one of the largest segments within the HealthTech sector with the US occupying ~55%+ of the global RCM market
• Regulatory mandates for adoption of Electronic Health Records are driving growth for the RCM market. Outsourcing is expected to grow faster on the back of growing reimbursement complexity, need for increasing cash flow for hospitals operating at low margins, and offshoring capabilities
• Expect to see significant cross-over, partnership and/or merger between pure healthcare eCommerce and digital health services platforms
• Offline + Online integration expected to continue with traditional healthcare service providers adding digital capabilities through inorganic path
• Consolidation in the digital HealthTech sector is expected to increase due to market fragmentation and slowdown in funding availability
• Healthcare Analytics and RCM outsourcing players will continue to see significant traction from PE investors due to high growth and profitability 

Download the full report for more insights regarding the global HealthTech sector landscape

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About BDA Partners

BDA Partners is the global investment banking advisor for Asia. We are a premium provider of Asia-related advice to sophisticated clients globally, with over 25 years’ experience advising on cross-border M&A, capital raising, and financial restructuring. We provide global reach with our teams in New York and London, and true regional depth through our seven Asian offices in Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul, and Tokyo. BDA has deep expertise in the Chemicals, Consumer & Retail, Health, Industrials, Services, Sustainability and Technology sectors. We work relentlessly to earn our clients’ trust by delivering insightful advice and outstanding outcomes.

BDA Partners has strategic partnerships with William Blair, a premier global investment banking business, and with DBJ (Development Bank of Japan), a Japanese Government-owned bank with US$150bn of assets. bdapartners.com