Hahn & Co invests $190m in South Korea's Woongjin Foods
Hahn & Co has paid $190 million for a 57% stake in Woongjin Foods, Korea's third largest non-alcoholic beverage company and subsidiary of ailing conglomerate Woongjin Group.
The unit was acquired via a court receivership auction which came about after the parent company filed for bankruptcy in late 2012. At total of 23 letters of intent are said to have been submitted with five parties submitting binding bids. Aside from Hahn & Co, other bidders included an international strategic investor and three Korean conglomerates.
Founded in 1976, Woongjin Foods produces a range of canned and bottled beverages across four categories: juice, under the Grateful Nature brand; traditional Korean drinks, which includes rice beverage brand Morning Rice; bottled tea and its BABA brand ready-to-drink coffee.
"We have a positive outlook on the Korean beverage market," Scott Hahn, CEO and founder of Hahn & Co told AVCJ, " Changes in family composition and household income has led to pretty robust growth in health drinks, traditional Korean drinks, and the ready-to-drink tea and coffee segment."
This opportunistic investment, which came via Hahn & Co's 2010 vintage maiden fund which reached a hard cap of $750 million in August 2011 - represents the team's first consumer play since its spun out from Morgan Stanley Private Equity Asia (MSPEA) in 2010.
"The company benefits from really strong brand recognition across its four flagship brands, explains," added Hahn. "Right now we have a strong business where we can bring in a number of product extensions and strengthen distribution; at the same time there is an opportunity to consolidate both within the business and the domestic market."
This is not the first time Woongjin Group has been forced to sell off part of its business to private equity. In 2012, the company agreed to sell 31% of its water purifier unit, Woongjin Coway, to MBK Partners for KRW1.1 trillion ($1.1 billion) after heavy investments in solar energy and the impact of a slowing South Korean real estate market on the company's construction and finance businesses left it mired in debt.
Hahn & Co's maiden fund is now over 50% deployed, with Woongjin foods represent the fund its sixth buyout deal and seventh deal overall.
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