이 기사는 2020년 05월 14일 08:00 thebell 에 표출된 기사입니다.

IS Dongseo, a South Korean construction company, is considering offloading its subsidiary ATOSTUDY.

IS Dongseo has started tapping potential buyers to sell its controlling stake in ATOSTUDY, a studying-space company, sources close to the matter said on Monday. The possibility is high that the company could be sold through a negotiated sale.

The enterprise value of ATOSTUDY is estimated at roughly 30 billion won. Its equity is expected to be valued at about 20 billion won, up more than 42 percent from the value in May 2017 when IS Dongseo bought a 55 percent stake in the company in a mix of common shares and convertible preferred shares.

At the time, IS Dongseo paid five billion won for 35.7 percent common shares in ATOSTUDY, which could translate to the entire equity value of about 14 billion won.

ATOSTUDY has continued to grow in size for the last three years under IS Dongseo’s ownership. Its revenue increased to more than 10 billion won for 2018, from 5.4 billion won for 2016, and has since grown steadily.

But its market dominance is less impressive than that of competitors, some industry watchers pointed out. This is largely attributable to ATOSTUDY’s business model that focuses on directly-managed branches. The company operates two brands – GreenLamp Library and GreenLamp Squre, each for students and adults – with 42 branches nationwide directly operated by ATOSTUDY.

This contrasts with its rivals like TOZ Study Center and Zaksim, which have reached economy of scale with their franchise business model. According to data from the Fair Trade Commission, TOZ Study Center has 350 branches, among which 345, or 98.6 percent of total branches, operate under franchise agreement. 160 branches of Zaksim, which represents more than 91 percent of its total branches, are also franchised.

The valuation of ATOSTODY, therefore, could vary depending on potential buyers’ preference for its business model. Directly-managed branches could help the company maintain high-quality services, but at the same time could slowly grow in number compared to franchised branches.

The domestic studying-space market has seen a continued growth since IS Dongseo’s acquisition of ATOSTUDY, with the number of study-room branches across the country rising by 20 percent during the past three years to 5657 in 2019, according to data from Korean Educational Statistics Service (KESS). An average fee per month has also increased by 19 percent in the same period to 348,013 won.

(By reporter Rho Ar-rum)