이 기사는 2021년 07월 20일 08:02 thebell 에 표출된 기사입니다.

IMM Private Equity (IMM PE) is set to acquire online pet retailer Pet Friends as the private equity firm is betting on the growth potential of the South Korean pet market.

IMM PE signed an agreement to buy the company’s shares held by existing venture capital investors and a partial stake from Kim Chang-won, the founder and chief executive of Pet Friends, on Thursday, industry sources said. Existing strategic investor GS Home Shopping will also raise its stake by making an additional investment in the company.

IMM PE ad GS Home Shopping will together buy existing investors’ shares worth about 110 billion won ($96 million). With a focus on adding value to the company, they will also put 50 billion won into Pet Friends by acquiring new shares. About 30 billion won will be injected first and the remaining 20 billion won will be invested later depending on the company’s performance.

The deal will give IMM PE a 65% stake in Pet Friends. GS Home Shopping’s holding in the company will also increase from the current 15% to 30%. Kim will keep a 5% stake and continue to be involved in the company’s operations.

The transaction is expected to be completed as early as next month as a regulatory review process is already underway.

Since its foundation as an online-to-offline business in 2016, Pet Friends has grown rapidly by expanding its service to include one-day pet supplies delivery. It sells various pet supplies like food, treats and litter through its app and also provides a 24-hour chat service for pet owners.

IMM PE is expanding its portfolio in the ecommerce retail space. The Seoul-based firm earlier this year sold its 80% stake in online fashion store W Concept to Shinsegae’s SSG.com for 200 billion won. The exit generated a 30% internal rate of return just in three years.

IMM PE decided to invest in Pet Friends as it seeks to capitalize on the growth of the pet products market in South Korea. The firm also believes Pet Friends is better positioned in the market with its platform business model.

GS Home Shopping is also expected to explore ways to create synergy with Pet Friends. As GS Home Shopping has recently been merged into offline retailer GS Retail, Pet Friends is likely to cooperate with GS across the conglomerate’s retail network.

Samil PwC acted as accounting adviser to IMM PE. Shin & Kim served as legal counsel and Bain & Company provided commercial due diligence. (Reporting by Hee-yeon Han)