MBK secures partial exit from Korea's Coway

The private equity firm sold 3.78 million shares, reducing its interest in Coway from 31.47% to 26.81%, according to a filing. Local media reported that the selling price was KRW98,000 per share, a 6.6% discount to the May 15 closing price. As of midday on May 17, Coway was trading at KRW98,800, valuing MBK’s remaining stake at around KRW2 trillion.

Founded in 1989, Coway is the dominant player in Korea's health appliance industry, generating most of its revenue from rental and maintenance services for water filtration and air purifier devices. MBK bought a controlling interest from bankrupt Woongjin Holdings in January 2013 for KRW1.2 trillion.

A strategic review of the business was halted last September because MBK felt the stock was undervalued. That decision preceded an announcement by a government-appointed committee that a batch of Coway's purifiers were found to have defects that tainted water with nickel, posing a potential health risk. Consumers are seeking damages from the company.

Coway promised to take responsibility for any health problems that emerged and recalled the products involved. The company’s CEO was also removed. Coway shares have rallied since mid-March, rising from KRW87,600 to a peak of KRW110,500 on May 11. They remain up nearly 12% year-to-date.

The company posted revenue of KRW2.37 trillion for the 2016 financial year, up from KRW2.31 trillion for the previous 12 months. Net income dropped from KRW343.1 billion to KRW243.3 billion over the same period. In 2012, prior to MBK's investment, revenue and net income reached KRW1.81 trillion and KRW119.7 billion, respectively.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• North Asia
• Open market
• Consumer
• South Korea
• MBK Partners
• Exit