Eugene Asset Management to take over Joonggonara
Joonggonara corporate image / Courtesy of Joonggonara
By Kim Jae-heun
The country's first online flea market platform Joonggonara is about to be sold to Eugene Asset Management.
According to a source from an investment bank, the two entities will meet within this week to sign a stock sale agreement.
Joonggonara's value is currently estimated at around 100 billion won ($87.41 million). The two parties began negotiating with the aim of striking a deal since early last year.
Eugene Asset Management is eyeing acquiring 62.87 percent of Joonggonara's ordinary shares, followed by 47.78 percent owned by its CEO Lee Seung-woo, along with some preferred stocks.
Kiwoom Securities and Pureun Partners Asset Management, two financial investors holding Joonggonara's preferred stocks, plan to unload their holdings as well.
However, other strategic investors are planning to keep their stocks with the expectation that Joonggonara's financial condition will improve once the acquisition proposal is completed.
“Eugene Asset Management has been stumbling in raising funds to acquire the management rights of Joonggonara. But after that last strategic investor came in, everything started to go smoothly,” the source said. “Joonggonara's current enterprise value is arranged at too low a price. It has plenty of room to improve and the market is curious to find what synergy Eugene Asset Management will create with its new strategic investor.”
Joonggonara is the oldest online secondhand mall that started as an online community in 2003. The platform was incorporated in 2013 and launched a mobile application three years later.
Joonggonara had 23 million registered users as of last week. Its accumulated gross merchandise value by the third quarter of last year was 3.9 trillion won, up from 3.5 trillion won in 2019. Joonggonara's sales skyrocketed by 66.1 percent to mark 5.4 billion won during the period but its operating loss also expanded to 3.5 billion won.
The online flea market is making every effort to expand the categories of products traded on its platform, beginning to sell cars, bicycles and mobile phones recently. Joonggonara also opened offline stores to deal with the cars and cellphones. However, its car dealership business did not meet expectations and was closed down after a year.