Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Will KKR hit jackpot with TMON's listing?
The TMON headquarters in Seoul / Courtesy of TMON
By Park Jae-hyuk
KKR logo
By Park Jae-hyuk
Kohlberg Kravis Roberts (KKR) is drawing keen attention from market observers, who wonder whether the global private equity firm (PEF) will be able to hit another jackpot here with TMON which aims to be listed on the tech-heavy Kosdaq market next year.
Since Groupon sold its controlling stake in TMON in 2015 to the special purpose entity Monster Holdings that KKR and Anchor Equity Partners (AEP) established jointly, the two PEFs have been the largest shareholder of TMON.
KKR and AEP jointly hold a 98.38 percent stake in the e-commerce firm.
As it has been five years since the takeover, the investors are expected to accelerate their efforts to exit.
TMON failed in its attempt to go public in 2017, when it hired Samsung Securities as the lead underwriter.
Although it was rumored in late 2019 that TMON would be sold to Lotte, the e-commerce firm denied this, saying it would launch an initial public offering (IPO).
On April 27, TMON announced it had hired Mirae Asset Daewoo as the lead underwriter for its IPO.
When TMON sent a request for proposals to major brokerages a few weeks earlier, there was a concern about a postponement of the IPO as large securities firms looked hesitant about taking charge of the e-commerce firm's listing.
However, as online shopping has grown in popularity due to social distancing policies sparked by the COVID-19 pandemic, brokerage houses have begun paying attention to TMON.
In addition, TMON announced April 29 that its operating loss fell 41 percent to 75.3 billion won ($62 million) in 2019.
The company said it aims to turn a profit by the end of the year.
According to sources, its enterprise value is estimated at around 1 trillion won, and it wants to raise 400 billion won through the public offering.
TMON CEO Lee Jin-won mentioned stable financing and transparent management as the main reasons for his company's planned IPO.
“The IPO is intended for fundraising, rather than for the largest shareholders, KKR and AEP, to recoup their investments,” a TMON official said.
Industry sources, however, still expect a possible sale of TMON, considering the nature of PEFs that are desperate to recover their investments.
“After stabilizing the company's valuation by improving its profitability, the PEFs may seek to sell it,” an industry source said on condition of anonymity.
Over the past few years, KKR has made successful investments in the Korean market.
Along with AEP, it bought a 100 percent stake in Oriental Brewery for $1.8 billion from AB InBev in 2009, and then resold the brewer to AB InBev for $5.8 billion in 2014.
In 2019, KKR sold KCFT to SKC for 1.2 trillion won, a year after it bought the former LS Mtron's copper foil and thin film business for 300 billion won.
Earlier in 2020, KKR-led consortium sold BLK Pyeongtaek Logistics Center in Gyeonggi Province to Pebblestone Asset Management.
KKR used part of its $6 billion Asian Fund II raised in 2013 for its investment in the logistics center, and the fund was also used for its investment in TMON.