As Chairman Kim Yong-woo sells DOUZONE BIZON to global private equity fund (PEF) EQT Partners, attention is turning to his daughter. Born in 1961, Kim has two daughters, but they hold no equity in DOUZONE BIZON and do not take part in running the company.
However, one of the two daughters is in charge of operating the companion-animal theme park "Dog Forest," run by DOUZONE B&CT, a private company 94.39% owned by Chairman Kim, and observers expect Kim and his daughter to continue running this company.
According to reporting compiled by ChosunBiz on the 9th, EQT Partners, a PEF manager of Sweden's Wallenberg family, signed a stock purchase agreement (SPA) last month to acquire 22.29% equity held by DOUZONE BIZON's largest shareholder, Chairman Kim Yong-woo, and 14.4% equity held by an affiliate of Shinhan Financial Group, for about 1.3 trillion won.
Kim chose an external sale rather than passing DOUZONE BIZON to his daughter through a family business succession. DOUZONE BIZON is a homegrown ICT company leading the domestic enterprise resource planning (ERP) market.
ERP is a system that integrates and manages all business process activities of corporations, including production, logistics, finance, and accounting. In Korea's ERP market, DOUZONE BIZON ranks second after Germany's SAP, recording revenue of 402.3 billion won and operating profit of 88.1 billion won last year.
Kim has long considered succession for DOUZONE BIZON. However, his two daughters are not interested in running DOUZONE BIZON and have never actually taken part in management. They also hold no equity in DOUZONE BIZON. One of Kim's daughters, though, is interested in the companion-animal business and is currently operating the Dog Forest companion-animal theme park at DOUZONE B&CT.
Dog Forest, created in the pristine nature of Chuncheon, Gangwon Province, on 135,000 square meters (about 40,000 pyeong), is a complex cultural space for companions and their dogs to enjoy. It includes not only a playground exclusively for dogs but also a cafe and educational facilities.
Currently, the CEO of DOUZONE B&CT is Chairman Kim, and his daughter is in charge of key company operations, including hosting international dog events such as dog agility sports competitions at Dog Forest.
DOUZONE B&CT is said to be excluded from the sale of DOUZONE BIZON to EQT Partners. The deal centers on the software (SW) business, and Kim and his daughter are expected to run DOUZONE B&CT going forward with the companion-animal theme park as its core business.
A business succession consultant said, "If founder Chairman Kim Yong-woo had intended a family succession, he would have gradually gifted equity to his two daughters, but given that he did not, it appears he had no intention from the outset to pass the corporation to his children."
The consultant added, "The old formula that family succession ensures continued corporate growth is changing," and predicted, "In mid-sized IT companies like DOUZONE BIZON, capital redeployment and business advancement through 'third-party sales' will become even more active."
However, DOUZONE B&CT's financial condition has deteriorated, leaving it with the task of normalizing operations. The auditor issued an opinion that uncertainties exist that raise substantial doubt about DOUZONE B&CT's ability to continue as a going concern.
According to the audit report, as of the end of last year, DOUZONE B&CT's current assets stood at 300 million won, while current liabilities reached 90.8 billion won. Current liabilities exceed current assets by about 90 billion won.
In particular, repayment of short-term borrowings among current liabilities amounts to 87.1 billion won. This is a high-risk structure more than 17 times revenue (5.1 billion won) during the same period, meaning the company is effectively running on borrowings. Last year's net loss was 8.9 billion won. In 2023, it posted revenue of 4 billion won and a net loss of 12.5 billion won.
An accountant said, "To sustain DOUZONE B&CT's operations, it needs to reorganize its borrowing structure and secure liquidity in the short term," adding, "In the mid to long term, it should move to monetize by strengthening various high value-added services that leverage the Dog Forest brand, rather than being a simple theme park."