MBK to buy control of Korea e-commerce solutions provider

The private equity firm will pay Ki-rok Kim and Seong-jin Im – KoreaCenter's CEO and vice president – KRW 193.7bn for a 24.89% interest, according to a filing. This will be followed by a new share issue worth KRW 197.9bn. KoreaCenter's stock closed at KRW 6,990 on January 14, having risen 4.33% over the prior five days. The new share issue is priced at KRW 6,616 per share, a separate filing said.

MBK has also subscribed to KRW 100bn in bonds, which come with warrants that convert into approximately 14.9m shares at KRW 6,679 apiece. These will equate to 17.7% of KoreaCenter's total outstanding shares, a third filing states.

The target company has three main business lines: MakeShop, MySoho, and StamPang, which provide e-commerce solutions to Korean retailers; MallTail, Vitatra, and ShipGet, which support cross-border transactions through a network of 10 logistics centres across seven countries; and Nuri, a platform that leverages data mining and big data analysis to supply price comparison services.

As of the third quarter of 2020, KoreaCenter had 46,000 registered sellers and 6.57m members, while its app had achieved 19.6m cumulative downloads. Gross merchandise value was KRW 5.3trn. On the data side, the company offered 15.5bn shopping datasets.

Operating revenue came to KRW 251.5bn in 2019 and KRW 142.1bn in the first half of 2020, according to the most recent set of financial disclosures. Net profit for these two periods was KRW 7.01bn and KRW 6.73bn, respectively. Global fulfilment accounts for approximately two-thirds of overall revenue.

Towards the end of last year, KoreaCenter acquired a 51.3% stake in Danawa, a local price comparison engine and e-commerce platform operator, for about KRW 350bn. This reportedly laid the ground for MBK's move.

Korea's e-commerce space has been in consolidation mode as traditional retailers look to bulk up their online offerings to compete with pureplay digital platforms like Coupang, which listed in the US last year. Most recently, the online unit of Shinsegae acquired eBay Korea, usurping Coupang to become the second-largest player in the market after Naver Corporation's platforms.

MBK is currently deploying its fifth North Asia buyout fund, which closed on USD 6.5bn in May 2020. Last week, the firm sold a 12% GP stake to Dyal Capital Partners, a unit of US-based alternative investment firm Blue Owl that buys interests in third-party managers.

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• Topics
• North Asia
• Buyouts
• Consumer
• Technology
• South Korea
• TMT
• e-commerce
• MBK Partners