MBK’s Coway deal revived after court approval

The court tasked with overseeing Woongjin's bankruptcy proceedings had earlier indicated it was likely the sale agreement, which was reached in August, would be honored.

MBK will pay KRW50,000 per share - a 33% premium to the last close prior to the deal's announcement - for a 31% stake in the business. Of this, 28.4% will come from Woongjin and the remainder from other shareholders. According to local media, MBK may also pay KRW500 billion for shares in the company held by Lazard Asset Management and Morgan Stanley, taking its holding past the 50% mark. Lazard and Morgan Stanley own 14.5% and 4.7% of Coway, respectively.

Woongjin Holdings sought an investor in the business in order to help pay down its debts, with MBK stepping in after a bid from KTB Private Equity fell apart. Woongjin has made heavy investments in solar energy while a slowing South Korean real estate market has hurt its construction and finance businesses. It only acquired the construction business in 2007.

Coway had a 55% share of the Korean water purifier market last year, and 44% of the market for air purifiers. It posted a profit of KRW161.2 billion on sales of KRW1.82 trillion. The bulk of its revenues come through monthly payments on multi-year leases by households rather than direct sales. This stable business model has much in common with MBK's cable television investments.

Should the deal go through, it would be Korea's joint-largest private equity transaction of the year.

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• Topics
• North Asia
• Buyout
• Industrials
• South Korea
• manufacturing
• buyout
• MBK Partners