Affinity pays $239m for majority stake in Korean music platform
Affinity Equity Partners will pay KRW265.9 billion ($239 million) for a 52.6% stake in Loen Entertainment, a South Korean record label and digital music platform. The holding is being divested by SK Planet, a subsidiary of SK Telecom, the country's largest mobile operator.
Star Invest Holdings, a vehicle controlled by Affinity, will buy approximately 13.3 million shares in Loen for KRW20,000 apiece. As a result, SK Planet's interest in the company will fall to 15%. Star Invest will also acquire shares from RealNetworks for an overall stake of 61.4%.
SK Planet said the divestment would allow it to focus on growing its entertainment business globally. The company is looking to expand in the US, Europe and Southeast Asia.
Loen was founded in 1978 as Seoul Records, a subsidiary of language-teaching recordings provider YMG Sisa. It distributed pop and classical music records and eventually listed on KOSDAQ in 2000 as YMB Seoul Records.
SK Telecom bought a 60% stake in the business in 2006 for KRW29.2 billion, renaming it Loen Entertainment. The company assumed responsibility for MeIOn, SK Telecom's online music distribution platform and has gradually reinvented itself as a digital music platform.
Affinity was first identified as a likely buyer by local media in June. The private equity firm, which is in the process of raising its $3.5 billion fourth fund, has made a number of investments in South Korea. Last year it led a consortium that bought a 24% stake in Kyobo Life for KRW1.2 billion.
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