This article was published on March 28, 2025, at 5:32 p.m. on the ChosunBiz MoneyMove site.
KOSDAQ-listed REVU Corporation has been required to pay additional fees for the acquisition of short-form marketing company Short. This is because the valuation, which was 15 billion won at the time of acquisition, has risen to 18 billion won according to a contract that stipulates a revision of the valuation upon performance improvements.
According to investment banking industry sources on the 28th, the valuation of Short, which REVU Corporation acquired through a controlling stake in August last year as part of its bolt-on strategy and incorporated as a subsidiary, has been adjusted upwards by 20% from the previous 15 billion won to 18 billion won.
The acquisition price for Short by REVU Corporation has been adjusted to approximately 9.72 billion won. This adjustment comes seven months after the acquisition. The company acquired 54,000 shares (54% equity) at 81 million won with a per-share price of 150,000 won, and the per-share acquisition price has increased to 180,000 won. REVU Corporation will pay the difference of 1.62 billion won next month.
The widening gap in valuation expectations between sellers and buyers during the acquisition of Short led to the need for an additional payment after the acquisition. Earlier, REVU Corporation included a condition in the contract to raise the valuation if operating profit exceeded 2.5 billion won in 2024.
It has been reported that the sellers initially demanded a valuation of 20 billion won. REVU Corporation agreed to reassess the valuation at 20 billion won and make an additional payment if the operating profit exceeded 3 billion won in 2024, but Short's operating profit did not reach that amount last year.
As a result, the pockets of CEO Yoon Sang-soo, who sold his equity in Short to REVU Corporation, and two employees have become fuller. CEO Yoon received 7.5 billion won for the previous sale of 50% equity and will receive an additional 1.5 billion won due to the valuation adjustment.
Ultimately, REVU Corporation has benefited from its bolt-on strategy. In the first year following the acquisition of Short, the company recorded sales of 48.9 billion won, a 23% increase from the previous year's 39.7 billion won, with operating profit rising 14% from 3.6 billion won in 2023 to 4.1 billion won last year.
Key shareholders of REVU Corporation, Kiwoom Private Equity (Kiwoom PE) and Korea Investment Partners PE, have recently entered the process of selling management rights due to business expansion. LG Uplus, the second-largest shareholder of REVU Corporation, is being highlighted as a strong potential acquirer.