VIG buys Korean sports shoe materials supplier

The private equity firm is working in tandem with Youyoung’s founder and outgoing CEO, Hotae Chung, who will remain involved as the second-largest shareholder. He will become executive chairman of the company, with Thomas Bumjoon Kim, previously CFO of Hanon Systems and Korea Telecom, taking over as CEO.

Founded in 1991, Youyoung is Korea’s second-largest manufacturer of knitted fabric materials that feature in the upper section of athletic footwear. Customers include major global footwear brands such as Nike, Adidas, New Balance, Under Armour, Puma, and Sketchers.

The company is expected to generate KRW84 billion in revenue and KRW20 billion in operating profit in 2017. Revenue has been growing at a compounded annual rate of 32% since 2012, largely driven by the introduction of seamless materials. In 2015, Youyoung developed its own seamless technology – called the circular knit jacquard (CKJ) – in collaboration with Nike.

Songwook An, a managing partner at VIG, said that seamless materials are likely to account for an even larger portion of upper fabrics for athletic footwear “due to their ability to shorten what is a labor intensive and inefficient shoe manufacturing process.” He added that Youyoung is the global leader for CKJ.

This is the fourth investment from VIG’s third fund, which closed in February 2016 at the hard cap of $600 million. The other portfolio companies are funeral service provider Jo-Un Life, used car retailer and maintenance business Autoplus, and Press & Converting, a manufacturer of facial masks primarily used for skincare.

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• Topics
• North Asia
• Buyouts
• Industrials
• South Korea
• VIG Partners
• manufacturing