April 25, 2024

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[THE INVESTOR] Q Capital Partners on Dec. 15 denied a report that its plan to sell controlling interest in the country’s No. 3 logistics company Dongbu Express has fallen apart again.

Q Capital Partners, which bought Dongbu Express jointly with KTB Private Equity two years ago, said that the talks with Dongwon Group, which was named preferred bidder for the 470 billion won (US$398.71 million) deal, are still ongoing. 

“There are some disagreements over the price but the negotiations haven’t collapsed. They are in progress,” Song Kyung-sup, senior executive vice president at Q Capital Partners, told The Investor.

Earlier in the day, a local news outlet reported that Dongwon Group decided to bow out of the takeover deal as the two-sides failed to narrow the price gap.

Dongwon hopes to slash the price by 80-90 billion won from the 470 billion won it had initially had proposed, according to people familiar with the transaction.

Slow progress in finalizing the deal also has sparked speculations that the talks are close to falling apart, given that Dongwon signed a memorandum of understanding with KTB Private Equity and Q Capital Partners to secure exclusive rights for negotiations with the sellers in September.

KTB Private Equity holds a 75 percent stake in the logistics service provider while Q Capital Partners owns the remaining. The duo bought the stake for 310 billion won in 2014.

Sealing the deal with Dongwon is crucial for the two private equity firms as it is their second attempt to exit the portfolio company in a year.

In 2015, the sale plan collapsed as it failed to attract potential buyers. 

Dongbu Express, which provides logistics services, including stevedoring, trucking and warehousing, posted sales of 719.5 billion won and operating profit of 44.4 billion won last year.

By Park Han-na (hnpark@heraldcorp.com)