KKR looking to exit Laser Clinics Australia

KKR is again considering an exit from Laser Clinics Australia.

There’s renewed chatter private equity firm Kohlberg Kravis Roberts is once again turning its attention to a possible exit from its hair removal and injectables clinic business Laser Clinics Australia.

The New York-based buyout fund has previously worked closely with Citi on the business it bought in 2017 for $650m.

Since that time, it has more than doubled in size, but the investment has not been without its wrinkles.

Following a falling out with franchisees who wanted to terminate their agreements, KKR has moved to buy the clinics back within the network.

Its expansion into Britain has also not been smooth.

It may be short of time to achieve a result. The business sits in one of KKR’s older investment funds which included businesses such as GenesisCare, the keys of which were handed to Oaktree Capital Management and its backers after it entered Chapter 11 bankruptcy.

Another challenge is barriers to entry into the industry are low, and many clinics had to shut during the pandemic.

Smaller rival SILK listed in 2020 and was privatised by Wesfarmers after it failed to trade above its float price.

The Laser Clinics business was founded in 2007 by Babak Moini and Alistair Champion, growing from 70 outlets to over 200 globally and performing 2.5 million treatments a year — cosmetic injections, hair removal and skin treatments.

The investment was appealing to KKR as beauty treatments in Australia and offshore are growing and appealing to a wider section of the population thanks to product innovation and declining service costs.

At the time SILK listed, the Australian market generated annual revenue of $5.4bn per annum and was expected to grow at an average annual rate of 10 per cent to $7.8bn by 2024.