H Private Equity (PE), a domestic private equity fund management firm, has been selected as the preferred bidder for the acquisition of DC Inside, the largest online community in Korea.
According to investment banking (IB) industry sources on the 13th, H PE is reviewing whether to acquire DC Inside. It is reported that they are currently conducting due diligence after being selected as the preferred bidder. After completing the due diligence, they are expected to sign a share purchase agreement (SPA). The target for sale includes the major shareholder's equity, which encompasses management rights, and the selling price is estimated to be around 200 billion won. Despite the sale of management rights, the founder and second-largest shareholder, Kim Yu-sik, is expected to remain a shareholder.
DC Inside is the largest internet community in Korea, established in 1999. The following year, in March 2000, it was incorporated under the name 'Digital Inside' and has undergone several business transfers and changes in governance structure to take on its current form. DC Inside is currently a 100% subsidiary of Community Connect. Kim, known as the 'face' of DC Inside, is reported to hold approximately 10% of the equity in Community Connect.
DC Inside ranks as the fifth site by traffic among domestic websites, following Naver, Google, YouTube, and Daum. Last year, it recorded revenue of 20.7 billion won and operating profit of 9 billion won, while in 2023, it is projected to achieve revenue of 18.4 billion won and operating profit of 9.8 billion won. The operating profit margin reaches 43.6%. H PE's push to acquire DC Inside is analyzed to be due to its high profitability.
H PE is a private equity fund management firm founded in 2022 by CEO Han Su-jae, who previously led the private equity sector at Medici Investment. After investing in beauty creator company Répertoire in the second half of last year, it has identified DC Inside as the target for new investment this year. Previously, it has invested in various industries, including implant manufacturer DIO, LOTTE Global Logistics, a logistics affiliate of the LOTTE Group, and Polaris Shipping.