$140 million: Inside the deal room with Kristy Chong


ModiBodi founder, Kristy Chong, successfully exited her leak-proof underwear business back in 2022, when it was acquired by Swedish retailer Essity for $140 million. Ahead of her appearance at the Forbes Australia Women’s Summit, we go inside the deal room to hear how she did it.

Kristy Chong will speak live at the Forbes Australia Women’s Summit on 26 March. Tap here to secure your ticket.

Leak-proof underwear perhaps isn’t the sexiest product to launch, but Kristy Chong knew it was an important one when she introduced Modibodi back in 2013. Though, the idea for it came a few years before that when, after the birth of her second child, Chong got back into marathon training and started experiencing bladder leaks.

Living in Seattle at the time, Chong was surrounded by organic, natural products, so using disposable ones like pads didn’t sit right with her. On a run, she thought of an idea for absorbable, reusable underwear. She broached it with her husband, and the two decided bootstrap the business with a $40,000 investment (and even a stint on Shark Tank that never got to air).

It took two years to develop and scientifically prove her product, but eventually Modibodi was ready to launch. By 2017, the business had $2.5 million in sales with Chong as CEO. By 2019, Chong had accepted investment from Quadrant Private Equity’s $400 million Quadrant Growth Fund. Two years later, her sales figures had swelled to $40 million, and by 2022, Modibodi was sold to Swedish global hygiene and health company, Essity, in a deal worth $140 million.

Inside the deal

The buyer: Founded in 2017, Essity owns brands like Libra, Sorbent, Handee and TOM Organic. It also already owned the Tena brand of disposable incontinence products, and its CEO Magnus Groth, was a big believer in the growth of the feminine hygiene market.

The deal: $140 million, finalised at the end of 2022 in a mix of cash and debt.

The team: Guiding her, Chong had an all-female advisory team from Deloitte, led by Kat McMaster, who had previously helped Chong secure meetings with about 20 private equity firms back when she was on the hunt for investment in 2019. (That led to private equity firm Quadrant taking a majority interest in Chong’s business.)

Back then, Chong says, it was tough to run a business and go through a deal process at the same time. “I was the person in the room, meeting with the lawyers, meeting with finance … It made me sick, I’ll be really honest. It was torturous.”  

This time around, Chong was armed with Quadrant, a CFO and a COO by her side – and McMaster – as they sought out a potential buyer for the business. But finalising a deal is tough.

“They dig at everything,” she says. “They want to cross their T’s and dot their I’s and make sure everything in your company is running how it should be. I was surprised how much they do turn over every detail, from legal and finance, to product and marketing.” 

McMaster and Deloitte helped Chong and the team find four potential buyers.  

“After the conversations I had with them, we felt like Essity was the right partner to take forward. They were very aligned with the Modibodi purpose and what we want to achieve.”

Kristy Chong

Then the negotiations began. Essity came to the table with a pretty good figure – though, that figure can change through the process and based on your trading to date.  

“There’s the buy figure, and then through the process, you take out any cash within the business. Usually there’s a working capital adjustment around your stock and your cash as well.”

The advice: Before walking into a deal room, Chong says it’s important to be prepared. To close the Essity deal, they went through a number of mock-up management presentations. 

“You know a lot more about your business than they do. You’re the expert, so you cannot feel intimidated.” But if you’re caught out with a question you don’t quite have the answer to, never lie, she says.  

“Just be honest. Say you don’t have the answer, and you’ll come back to them. It’s not a courtroom.” 

And lastly, Chong says there are no real adversaries in negotiations. Buyers and their advisors are just trying to understand your business to ensure they’re safeguarded. Her advice? See yourself as an equal.

“We’ve all got tenacity in us. Whether you’re the partner in a major law firm or not, you’re still going to home your family, and we’re all humans.”

The right now: Quadrant has since exited the business, as has Chong. She now reinvests into other women-led businesses. Last year, she announced investments into EV charging start-up, Everty, and biotech company Laronix.

“I’m happy that I’ve left this legacy and it can go on under these amazing people, with a new CEO to lead it and inspire the staff there,” Chong says. 

Kristy Chong will speak live at the Forbes Australia Women’s Summit on 26 March. Tap here to secure your ticket.

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