IMM PE to add value to Pet Friends with equity investment PE firm likely to use new capital to accelerate the online pet retailer’s growth

Translated by Ryu Ho-joung 공개 2021-07-21 07:59:56

이 기사는 2021년 07월 21일 07:56 더벨 유료페이지에 표출된 기사입니다.

IMM Private Equity (IMM PE) is set to complete its acquisition of Pet Friends as early as next month as it seeks to take advantage of the rapid growth of the South Korean pet consumption market.

The Seoul-based private equity firm last week signed a deal to buy a controlling stake in the online pet retailer. The acquisition is structured as a 100 billion won ($86.8 million) purchase of the company’s shares held by existing investors and a 50 billion won ($43.4 million) equity investment.

IMM PE has been exploring investment opportunities in the online retail space. Notable investments by the firm in the sector include online fashion retailer W Concept, which was sold to Shinsegae’s earlier this year with an internal rate of return of 30%.

Pet Friends is one of the major players in the South Korean pet products market. It offers quick delivery and customized services for pet owners. With a large base of loyal customers, the company has grown rapidly since its foundation in 2016.

IMM PE is expected to use new capital to increase the company’s value. Its value-adding strategy is likely to focus on fast delivery, marketing differentiation and increased product offerings.

Pet Friends is expected to strengthen its one-day delivery service, one of the factors that distinguish the company from its rivals. It intends to continue to grow its logistics capability.

The online pet retailer may also consider launching a new business in collaboration with a group of experts such as veterinarians. Developing its own private brand of healthy treat products could be one example.

As the company’s growth accelerates, product offerings need to be increased to expand its customer base. Pet Friends is expected to continue to expand its range of product offerings and launch more private label products in the coming years.

IMM PE is also already exploring opportunities for bolt-on acquisitions to enhance the company’s competitiveness, with a deal likely to be announced as early as the end of this year.

Existing strategic investor GS Home Shopping will become the second largest shareholder of Pet Friends after the transaction is completed. As the home shopping retailer was recently been merged into GS Retail – which operates one of the country’s largest convenience store chains and supermarket chains – Pet Friends is expected to cooperate with GS across the conglomerate’s overall retail network.

Pet Friends looks at Chewy as a role model. The US online pet retailer has grown rapidly in recent years on the back of a shift in shopping patterns to online and an increase in pet owners, positioning itself as a key player in the US pet market. Chewy went public in New York in June 2019, with its current market capitalization sitting at roughly $34 billion.

Pet Friends’ revenue has grown rapidly, from 3 billion won in 2018 to 40 billion won in 2020. Revenue for the first half of this year already exceeded 40 billion won, with its full-year revenue for 2021 expected to increase to between 60 billion won and 70 billion won. Its gross merchandise value is expected to grow to 80 billion won this year. (Reporting by Hee-yeon Han)
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