Taekwang Group signed a memorandum of understanding (MOU) with Aekyung Group on a stock purchase agreement, moving a step closer to acquiring Aekyung Industrial.
AK Holdings, the parent company of Aekyung Industrial, disclosed on the 12th that it had selected a consortium formed by Taekwang Industrial, private equity fund (PEF) manager T2 Private Equity, and Yuanta Investment as the preferred bidder and signed an MOU for a stock purchase agreement for Aekyung Industrial.
Aekyung Group said, "This sale is a strategic decision for transitioning our business portfolio along with improving our financial structure," and noted, "We will re-disclose within six months as soon as specifics are finalized."
The target of this transaction sale is about 63% of Aekyung Industrial equity held by AK Holdings and others. Based on the closing price that day, Aekyung Industrial's market capitalization was 409.9 billion won. The market has estimated Aekyung Industrial's corporate value at around 600 billion won, taking into account a management control premium. The acquisition price is said to have been discussed in the 400 billion to 500 billion won range.
Taekwang Group has primarily engaged in textiles and petrochemicals. With the acquisition of Aekyung Industrial, it plans to make cosmetics a new growth engine. Aekyung Industrial centers on household goods and cosmetics and owns a range of brands including "2080," "Kerasys," and "AGE 20's."
Taekwang Industrial, aiming to restructure its business, also unveiled a two-year "investment roadmap" of about 1.5 trillion won in Jul., planning to allocate funds to acquisitions related to cosmetics, energy, and real estate. Taekwang Industrial said, "If specifics are finalized during the subsequent transaction process, we will disclose them in accordance with relevant laws and regulations."