CVC Nears $800M Deal for EQT's China Lens Unit

CVC Capital Partners is reportedly in the final stages of negotiations to acquire the mainland China contact lens operations of Ginko International, a business currently held by European private equity giant EQT. Sources familiar with the matter indicate the transaction could reach a valuation of up to $800 million, inclusive of debt, signaling a significant move in the competitive Asian consumer healthcare market.

The divestment represents a strategic exit for EQT from a key segment of its portfolio. EQT gained control of Ginko International’s China assets following its 2022 merger with Baring Private Equity Asia, which had initially invested in the Taiwanese-founded contact lens manufacturer. Ginko International produces a range of products, from conventional to disposable lenses, alongside associated care solutions.

This potential acquisition follows a previous, unsuccessful attempt by EQT to offload the business. Last year, talks with US-based buyout firm Advent International for the same China-based unit reportedly stalled, preventing a prior sale. The current valuation range also reflects a recalibration from EQT's initial aspirations, which were understood to be targeting upwards of $1 billion for the asset.

The contact lens market in China presents a compelling growth narrative, driven by increasing disposable incomes, a growing middle class, and a rising awareness of eye health and cosmetic lens usage. The sector is projected to see sustained expansion, making it an attractive target for strategic investors. This segment of the healthcare industry is experiencing robust demand, with advancements in lens technology and a shift towards daily disposables further fueling market penetration.

Advisors from prominent financial institutions are reportedly involved in facilitating this transaction. JPMorgan is understood to be advising EQT on the sale, while Goldman Sachs is working with CVC Capital Partners. Despite the advanced stage of discussions, the sources cautioned that the deal is not yet finalized, and definitive terms are subject to change before any agreement is reached.

For CVC, this acquisition would bolster its presence in the rapidly expanding Asian consumer goods and healthcare sectors. The firm has a history of successful investments in consumer-facing businesses, and this move aligns with a strategy of acquiring established brands with strong market positions in high-growth regions. The deal underscores the ongoing appetite among major private equity firms for well-positioned assets in emerging markets, even amidst evolving economic conditions.