KKR's acquisition of Korea-based Kim's Club falls through

KKR and E-Land had reportedly agreed to a deal earlier this year worth KRW342-700 billion ($309-632 million). It was understood to have included transfer of a majority stake in 37 Kim's Club superstores as well as the chain's auxiliary facilities.

The transaction was intended to ease debt pressure on E-Land after a string of acquisitions, but was scrapped in light of a larger cash injection realized through the sale of the company's teen clothing division Teenie Weenie. According to an announcement, E-Land will sell the brand to China's V-Grass Fashion for RMB5.7 billion ($853 million).

"We have decided that the sale of Kim's Club doesn't have to be done by force as the deal size of Teenie Weenie is not small," Kyu-jin Lee, an M&A official with E-Land said, according to The Korean Herald.

The Teenie Weenie sale leverages rising cross-border interest in Korean cultural exports, including beauty and fashion products. AVCJ Research indicates more than $519 million has been deployed in Korean cosmetics and fashion segments this year, up from $256 million and $329 million in 2015 and 2014, respectively.

Recent private equity activity in this space includes an investment by L Capital Asia in Clio Cosmetics and an agreement by Bain Capital Private Equity and Goldman Sachs to acquire a majority position in Carver Korea.

KKR was active in the country last year with a $360 million investment alongside Anchor Equity Partners in e-commerce marketplace Ticket Monster. Last month, the firm named Hyoung Seok Lim as managing director of its Korea unit in a broader regional leadership reshuffle. It is expected to launch a pan-Asia fund later this year with a target of $6-7 billion.

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• Topics
• North Asia
• Consumer
• Buyouts
• South Korea
• KKR