이 기사는 2021년 07월 14일 07시37분 thebell에 표출된 기사입니다

K Car, South Korean used car retailer owned by Hahn & Company, is preparing for an initial public offering, which is closely watched by other buyout firms as a barometer of investor sentiment and how the country’s financial regulator will respond to a listing by a company wholly owned by a private equity firm.

K Car early last month filed paperwork with the Korea Exchange for its listing on Kospi. NH Investment & Securities and Goldman Sachs are acting as underwriters on the offering.

K Car was formerly the offline business of SK Encar and acquired by Hahn & Co in 2017. It has grown rapidly under the private equity firm’s ownership, with the company’s revenue rising to 1.32 trillion won ($1.15 billion) in 2020 from 742.7 billion won in 2018.

K Car’s IPO is being closely watched as the company is set to be the first used car retailer to be listed on the country’s stock exchange and also in that it is a listing attempt by a company wholly owned by a private equity firm.

There have been few listings by companies controlled by private equity investors in South Korea. In 2017 Orange Life Insurance, then owned by MBK Partners, went public on Kospi. VIG Partners’ Samyang Optics made a Kosdaq debut in the same year.

But exits via IPOs have not occurred in recent years. Anchor Equity Partners recently withdrew a plan to list shares in its coffee chain A Twosome Place. Baring Private Equity Asia, which weighed options of a sale or listing of parcel delivery firm Logen, chose to sell the company to Cowell Fashion.

For buyout firms, an exit via an IPO can be less favorable compared to a sale where they can include a control premium in the price. A lull in the domestic IPO market in the past years was another reason that few private equity firms considered listings of its portfolio companies.

However, the stock market boom that started this year makes an exit via an IPO more attractive. Reducing a stake by making a partial exit via an IPO can help a buyout firm make a full exit later, industry watchers said.

K Car’s listing can be served as a barometer of future IPOs by companies owned by buyout firms. The IPO is expected to happen in the second half of the year if everything goes smoothly. Another thing to watch from the IPO process is how the Financial Supervisory Service, the country’s financial regulator, will respond to a listing by a company wholly owned by a private equity firm, observers said.

“I am closely watching whether K Car, which is wholly owned by a private equity firm, will make a successful stock market debut,” said an official at one private equity firm in Seoul. “I will consider taking our portfolio companies public if the listing is successful.”

Other private equity firms considering exits via IPOs include Well to Sea Investment. The Seoul-based firm hired underwriters to take its two portfolio companies, auto parts supplier Junjin Construction & Robot and equipment parts supplier Will Be S&T, public on the domestic market (Reporting by Se-hun Jo)