April 26, 2024

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[THE INVESTOR] Korean private equity firm Hahn & Co. is planning to sell its beverage company Woongjin Foods, according to news reports on March 16.

The plan comes after Hahn & Co. attempted in November last year to acquire CJ Healthcare -- medicine and biotech unit of CJ Group -- to create synergies with Woongjin Foods. However, even though it reportedly submitted the highest bid worth 1.4 trillion won (US$1.29 billion), it failed to close the deal.

When contacted, company officials declined to confirm the plans, but according to sources it is reportedly looking for an underwriter for the sale. The specific plans are likely to be disclosed next month, after the company announces its 2017 earnings report, sources said.

According to industry sources, Hahn & Co. will be able to sell Woongjin Foods for around 213 billion won, since the price is usually 10 times the EBITDA, which was around 21.3 billion won in 2016.

Hahn & Co. acquired Woongjin Foods from Woongjin Group in 2013 for 95 billion won, when its operating loss was around 1.1 billion won. The PEF managed to turnaround the company the next year.

Woongjin Foods’ sales last year were 223.5 billion won and its operating profit reached 14.2 billion won. The beverage firm’s profit improved as it discontinued less competitive products such as refrigerated juice and focused on selling beverages that can be stored at room temperature.

Hahn & Co was established in 2010 and currently manages more than 4 trillion won assets. The firm has purchased 14 firms, including large cement makers, over the past eight years.

By Song Seung-hyun (ssh@heraldcorp.com)