MBK named preferred bidder for Korea’s Hi-Mart

Reports of Hi-Mart's imminent sale have been circulating since early in 2012. Several South Korean retailers were said to be interested, as well as some private equity firms, although it was thought the latter might struggle to finance the deal.

Eugene Corp. is one of three major shareholders that between them own 57.6% of Hi-Mart. Their stake is worth about $700 million, based on the company's most recent share price. Hi-Mart's EBITDA forecast for 2012 is $343 million, according to Thomson Reuters, and working on a typical multiple of 8-9x for retail businesses, the enterprise value would be $3.1 billion.

Eugene and its partners bought Hi-Mart from Affinity Equity Partners and Government of Singapore Investment Corp. (GIC) in 2008 for just over $2 billion. Affinity and GIC originally paid $769 million for an 80% stake three years earlier.

A consortium including H&Q Asia Pacific and IMM Private Equity bought a 35% stake in Hi-Mart for $257 million in 2010. The company went public in June 2011, raising $384 million.

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• Topics
• Buyouts
• Consumer
• North Asia
• MBK Partners
• South Korea
• Consumer
• buyout