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THE INVESTOR
January 20, 2018

Deals

Race heats up for SK Encar acquisition

  • PUBLISHED :September 19, 2017 - 15:58
  • UPDATED :September 19, 2017 - 16:33
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[THE INVESTOR] Four Korean private equity firms have joined the race to acquire SK Encar, SK Group’s used car business, according to news reports on Sept. 19.

STIC Investment, Hahn & Company, Keistone Partners and Medici Investment reportedly submitted their bids for the deal. SK Holdings and Samil PricewaterhouseCoopers, the deal adviser, plan to shortlist bidders this week and give a month for due diligence. 




Related: 
SK to sell SK Encar in car-sharing push


The deal price is expected to range from 100 billion won (US$85 million) to 200 billion won.

The PEFs are seeking synergies with their existing automobile or logistics businesses with the SK Encar acquisition. Hahn & Company has invested in Ssangyong Materials, an auto parts maker, while STIC Investment also owns a local parts manufacturer Daesung Eltec. Medici Investment holds a 32 percent stake in Lotte Global Logistics.

SK is selling its second-hand car business due to slowing profits despite the overall growth of the nation’s used car market. The firm posted 818.9 billion won revenue and 10 billion won operating profit last year.

The nation’s antitrust law that earmarks used car business for small and medium enterprises is also believed to have influenced the decision as the group faces regulatory limits for business expansion.

Following the sale, industry watchers say SK is likely to focus more on its car-sharing business. It acquired a 20 percent stake in Socar, the nation’s No. 1 car-sharing platform, for 58.9 billion won last year and invested 15 billion won in May this year.

SK Holdings announced on Sept.7 that it has joined a US$92 million Series D funding for San Francisco-based car-sharing company Turo together with Germany’s Daimler and other investors. Turo, one of the largest car-sharing services in Silicon Valley, provides peer-to-peer car rental services in around 5,000 areas in the US, the UK and Canada.

By Park Ga-young (gypark@heraldcorp.com)
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