Announcement of Acquisition of Shares in Hotspring Ventures Limited, Operator of "Wahanda", an Online Beauty Reservation Service in Europe
May 01, 2015
Recruit Holdings Co.,Ltd.
Recruit Holdings Co., Ltd. (hereinafter the "Company") has announced that it has decided to acquire shares in Hotspring Ventures Limited (Headquarters: London, England; CEO: Lopo Champalimaud; hereinafter "Hotspring"), an European online hair and beauty marketplace, through the Company's consolidated subsidiary in the U.K. and the wholly owned corporate venture capital company "RGIP LLC" (Headquarters: Chuo-ku, Tokyo; Representative: Kazumasa Watanabe; total investment amount: ¥4.5 billion; hereinafter "RGIP"), and to make it a subsidiary of the Company's group, as outlined below.
The existing management team of Hotspring own a portion of shares of the Company's consolidated subsidiary in the U.K., thereby making them indirectly shareholders in Hotspring. The management team will continue to oversee management of Hotspring together with the Company.
1. Purpose of the acquisition of the shares
Since launching its online beauty appointment booking services in the U.K. in 2012, Hotspring has been operating a consumer marketplace and providing sophisticated salon management software, free of charge, to spas and hair and beauty salons. Led by an excellent management team, with extensive experience in online reservations, Hotspring is currently the market leader in online hair and beauty bookings in Europe, operating in 5 countries (U.K., Germany, Lithuania, Switzerland, and Austria), with approximately 12,000 listed salons as of April 2015.
The opportunity in the European beauty market is high compared to the rest of the world; however, the adoption of online reservations in the beauty industry is still less than 1% in the 5 major EU countries (U.K., Germany, France, Italy, and Spain), which is extremely low compared to the travel market. Hotspring's initial growth shows that online reservations in the beauty market offer a huge opportunity and significant growth can be expected in the future.
The Company, following its investment in Hotspring in July 2014 (through RGIP) and subsequent discussions regarding the EU growth strategy, believes combining Hotspring's marketing capabilities and reservation expertise, with the Company's experience in the beauty industry gained from Hot Pepper Beauty, will create a global leader in the online beauty reservations market. The Company has therefore decided to acquire the shares in Hotspring and make it a subsidiary as its first fully-fledged overseas operation in the beauty field.
The Company has a long-term vision to become a group providing the number one global matching platform in each of the verticals in which it operates. That includes being the number one in the Marketing Media business by approximately 2030, and the global number one in the HR business by approximately 2020.
The Company is proactively entering new verticals and expanding existing businesses, through M&A in Japan and overseas, financed by the stable cash flow generated from existing domestic businesses. This transaction will help expand the Company's Lifestyle operations which includes travel, dining and beauty.
3. Outline of subsidiaries acquiring the shares
(1) RGF Beauty UK Ltd.
The existing management team of Hotspring is scheduled to hold 10.65% of shares of RGF Beauty UK Ltd. on the date of execution of share acquisition.
(2) RGIP LLC
4. Outline of transferring subsidiary (Hotspring Ventures Limited)
The financial data for the year ended December 31, 2014 is unaudited.
5. Outline of major sellers of the shares
(1) Europe Ventures LP
(2) Panarea Capital, L.P.
(3) Lepe Partners (Wahanda) LP
(4) Lopo Champalimaud
6. Number of shares to be acquired, acquisition cost, and shares held before and after the acquisition
- 1. Number of shares to be acquired includes the total amount of shares of common stock and classified stock, etc. of Hotspring to be acquired by the Company's group.
- 2. "Shares, etc. of Hotspring Ventures Limited" under acquisition price includes the sum of the respective consideration for common stock and classified stock, etc. of Hotspring to be acquired by the Company's group.
- 3. The sum of consideration for common stock and classified stock, etc. of Hotspring converted at ¥181.55 to 1 pound and estimated amount of advisory fees, etc. is listed as total acquisition cost (estimated amount).
8. Future forecasts
The impact of the acquisition of shares on the consolidated financial results of the Company for the year ending March 31, 2016 is currently under review.