MBK completes exit from Korea's Coway

Woongjin Thinkbig will acquire approximately 16.4 million shares – or a 22.17% interest – for KRW103,000 apiece, according to a filing. Yonhap News Agency reported that STIC Investment would participate in the buying consortium. Ji-yong Ahn, head of Woongjin’s planning and coordination office, added that the conglomerate planned to sell some other assets to finance an increase in its Coway holding.

Coway’s stock dropped nearly 25% on October 29 in response to the announcement, closing at KRW63,000. As of late morning trading on October 30, it had recovered to KRW66,400.

MBK previously sought to exit the company in 2016 but halted a strategic review because it 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. The company promised to take responsibility for any health problems that emerged and recalled the products involved.

In May 2017, MBK reduced its holding from 31.47% to 26.81%, generating proceeds of approximately KRW370 billion. A further interest of approximately 5% was offloaded in September of this year for around KRW311.4 billion.

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.

Woongjin underwent a court-led reorganization and now holds a portfolio of businesses spanning IT, energy, education, appliance rental, health and beauty, and leisure and tourism. Thinkbig produces educational content for school-age children.

Coway posted revenue of KRW2.52 trillion for the 2017 financial year, up from KRW2.38 trillion 12 months earlier. Net income rose from KRW243.3 billion to KRW326 trillion. In 2012, prior to MBK's investment, revenue and net income reached KRW1.81 trillion and KRW119.7 billion, respectively.

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• Topics
• North Asia
• Trade sale
• Consumer
• South Korea
• MBK Partners
• Exit