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THE INVESTOR
June 19, 2018
Big Reunion

Deals

VIG Partners in no hurry for Bodyfriend IPO

  • PUBLISHED :March 09, 2018 - 14:46
  • UPDATED :March 09, 2018 - 15:37
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[THE INVESTOR] Korean premium massage chair maker Bodyfriend has no immediate plans to make its stock debut, according to its largest shareholder VIG Partners on March 7.

“We have no plans for Bodyfriend’s IPO anytime soon,” Lee Chul-min, managing partner of VIG Partners, the Seoul-based private equity firm, told The Investor. “It’s been less than three years since we acquired the firm. We will make more efforts to accelerate its growth and global expansion.” 


Bodyfriend's premium massage chairs



Related:
VIG Partners acquires Nike supplier Youyoung Industries for W220b
Korean massage chair gets Lamborghini treatment


Bodyfriend’s upbeat sales have stirred speculations about its imminent market debut that is closely linked to VIG’s exit plans. Since the PEF acquired the firm in 2015 for 400 billion won (US$374.39 million), its operating profit almost doubled to 120 billion won last year. Now the market valuation is estimated to reach almost 2 trillion.

“We did hold some meetings with IPO advisors but are still gauging the market sentiments,” Lee added.

He also offered an upbeat outlook for Bodyfriend’s growth, saying the nation’s massage chair market is still in its infancy with the filtration rate remaining below 5 percent, as compared to 15-20 percent in Japan and Taiwan. For its global push, the firm plans to pour resources into nascent but larger markets like the US and China.

VIG, formerly Vogo Investment, one of the nation’s first PEFs established in 2005. While its local rivals like MBK Partners and IMM Private Equity have been seeking global expansion, it has been focusing on mid-sized deals in Korea -- now the most dynamic buyout market in Asia. Lee, former senior project leader at Boston Consulting Group, is one of the firm’s founding members. 


VIG Partners managing partner Lee Chul-min



The PEF, currently in its third funding round, has so far acquired more than 15 firms mostly in retail and consumer sectors. It sold Burger King Korea for 210 billion won to Hong Kong-based Affinity Equity Partners in 2016 -- almost double the buying price of 110 billion won from Doosan Group in 2012. Its recent purchases include Youyoung Industries, a local sneaker material maker, for 220 billion won; Klasse Auto, the largest dealer of Volkswagen cars here, for 20 billion won; funeral service firm Good Sangjo for 65 billion won; and Samyang Optics, an optical equipment maker, for 68 billion won.

“For the current third fund worth 700 billion won, about one-third of the investors were foreign institutional investors. We aim to raise the portion up to 50 percent in order to more promptly respond to risks in different markets,” Lee said, adding the firm plans to raise the fourth fund worth about 800 billion won next year.

“Korea, along with Australia, is the only Asian market where sizeable buyout deals are made. We will further strengthen our specialty in adding value to undervalued firms with great potential here.”

By Lee Ji-yoon (jylee@heraldcorp.com)

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