이 기사는 2019년 12월 16일 08:00 thebell 에 표출된 기사입니다.

VIG Partners, South Korea’s first generation private equity (PE) firm which focuses on mid-market buyouts, has showed strong performance in a wide range of fields this year.

VIG announced in late November that its portfolio company Winplus signed an agreement to purchase Hanwha Hotels & Resorts' food service business unit for about 100 billion won.

Several strategic investors paid keen attention to the deal from the beginning. CJ Group's food distribution and catering affiliate CJ Freshway Corporation, Glenwood Private Equity, Affirma Capital participated in the first round of the auction held in June. The offer price, however, was far less than the seller's target price of around 200 billion won, and the gap remained unchanged while due diligence was conducted. Consequently, only CJ Freshway made a binding offer in the final round of the action held in July, with the other two dropping out of the bidding process. Hanwha Hotels & Resorts and CJ Freshway had reportedly been in final negotiations, though the deal ended up being canceled in October. Having learned the news that the transaction fell apart, VIG contacted Hanwha.

VIG make investments and exits only through a private deal. It is because the PE firm thinks a private deal will give the firm more bargaining power than a public auction considering the firm’s focus on mid-market buyouts. The Hanwha deal is a good example of the firm’s investment strategy.

South Korea’s funeral service company JounLife, VIC’s portfolio company, made a bolt-on acquisition of another funeral firm Modern this year for about 10 billion won. VIG purchased JounLife in 2016, before it took over Kumkang Mutual Aid in 2017 and Modern in 2019.

The local PE firm also bought a majority stake in the education services platform D.Share in November. The firm acquired a 50 percent stake plus one share for 165 billion won. VIG had been actively searching for opportunities to invest in online-based businesses after it exited its investment in Summerce Platform, an operator of Korea's oldest shopping price comparison site Enuri.com, last June.

The main business of D.Share is related to education services. However, VIG focused on the company's platform. The company not only provides its clients with online lecture programs remotely but also learning management services in its on-site centers. Such a hybrid business model appealed to the PE firm.

VIG has been busy cashing out this year. VIG sold around 60 percent stake in Samyang Optics, an optical equipment maker, to a consortium comprising LK Investment Partners and A2 Partners. VIG acquired the optical equipment maker via its second fund in August 2013 and sold a 40 percent stake via an initial public offering (IPO) last June.

After the acquisition, the PE firm has invested actively in Samyang Optics’ R&D and manufacturing system. As a result, the company’s sales increased from 40 billion won in 2013 to 60.5 billion won in 2018 and its operating profit also increased from 11.1 billion won to 14.1 billion won during the same period. VIG ultimately generated a 3.5x return on capital invested (43 billion won) in Samyang Optics.

The PE firm also sold its portfolio company HiParking which was included in its second fund as well. VIG sold a 100 percent stake in South Korea’s parking operator HiParking to car-sharing company Flat for 170 billion won in late October. Flat is a subsidiary of Humax. VIG invested in the parking operator in 2016 and made a bolt-on acquisition of Wilson Parking last year, which made HiParking the country’s largest parking operator. VIG invested around 50 billion won in HiParking via its second fund and project fund.

VIG has accelerated the exit of its second fund partly because the firm is currently raising funds for its fourth fund. The PE firm started raising funds for its fourth fund earlier this year. The fourth fund reached its first close with total capital commitments of 620 billion won in May. The fund is expected to close with aggregate capital commitments of 900 billion won, surpassing its initial target of 850 billion won.

VIG made investments in the newly acquired D.Share via its fourth fund. Market is paying attention to how the PE firm will make investments with its ample funds next year.

VIG, formerly Vogo Investment Group, raised 700 billion won for its third fund in December 2017. The third fund invested in companies including JounLife, Autoplus, Winplus, PNC, Youyoung, Starvision, and Bonchon. Its 376 billion won second fund, which was launched in late 2011, has made seven investments. Of seven investments, the firm made five complete exits and currently Bodyfriend and Winche are left.

(By reporter Han Hee-yeon)