이 기사는 2020년 01월 21일 08시00분 thebell에 표출된 기사입니다

South Korea’s private equity (PE) firm Korea Investment Private Equity (KI PE) sells Dreamline, a broadband service provider, to IMM Investment. Stake in Dreamline, which is owned by SeAH Group will also be sold to IMM Investment (tag-along right).

According to M&A industry sources on January 16, KI PE has decided to sell Dreamline to IMM Investment. A share purchase agreement (SPA) is expected to be signed around next week.

Up for sale are an entire stake in the broadband operator owned by KI PE, a 26.22 percent stake owned by SeAH Networks and a 9.44 percent stake owned by SeAH Holdings. SeAH Group will exercise a tag-along right on its stake. Reportedly, KI PE and SeAH Group’s combined share of Dreamline is around 90 percent of the total number of issued shares.

KI PE and IMM Investment are said to have valued a 100 percent stake of the company at around 100 billion won, which makes the size of the deal to be approximately 90 billion won.

When there is a change in the largest shareholder in a communication service provider, the company has to receive approval from South Korea’s Ministry of Science and ICT. IMM Investment is expected to kick off the process at the end of this month or the beginning of next month. “The review by the Ministry is likely to be a three-month-long process. As the deal participants already reviewed legal issues on the Dreamline M&A, there isn’t likely to be any trouble completing the deal,” said an M&A industry source.

When KI PE attempted to sell Dreamline in 2018, the PE firm sent out teaser letters and aimed to sell the company by the end of 2018. Several potential buyers participated in preliminary bidding, but the sale process halted there. It is said that KI PE also considered initial public offering (IPO) as an option to exit Dreamline. Although it didn’t proceed with the idea, the PE firm had an internal discussion about the listing internally.

KI PE acquired the management right of Dreamline via EQ Partners No.2-1 Corporate Restructuring Limited in December of 2014. KI PE acquired a 71.8 percent stake in Dreamline (6 million shares) for 30 billion won via rights issue. It marked the first case where a financial investor acquired a domestic common carrier.

KI PE, a wholly-owned subsidiary of Korea Investment Holdings, held its extraordinary general meeting of shareholders on the last day of 2019 to change its company name from EQ Partners. EQ Partners was established in 2010 and became an affiliate of Korea Investment Group in March of 2017. As of the end of 2019, the firm has 1.75 trillion won in asset under management.

(By reporter Kim Byung-yoon)