이 기사는 2019년 12월 23일 08:00 thebell 에 표출된 기사입니다.

South Korea’s Kakao Mobility and Wemakeprice have reviewed the possibility of acquiring the nation’s fifth largest parcel delivery firm Logen Logistics.

According to M&A industry sources on December 16, Kakao Mobility, the mobility unit of South Korea's mobile giant Kakao, has received Information Memorandum (IM) of Logen and assessed the possibility of participating in a preliminary bid. The preliminary bid is expected to take place mid-January 2020. Kakao Mobility is a subsidiary of Kakao, which owns around 69 percent stake in the mobility arm. A private equity (PE) firm TPG, Korea Investment Partners and Orix own approximately 30 percent stake in the company.

Kakao Mobility is currently operating Kakao T that offers various mobility-related services including taxi-hailing, navigation systems, parking and chauffeur services. Market views that the company is showing an interest in Logen to expand its business area to logistics industry.

Kakao Mobility has concentrated on external growth to secure new growth engine. The company spent 150 billion won in investment activities in 2018 alone. Kakao Mobility invested 16.5 billion won in South Korea’s navigation software developer EnGIS Technologies and Japanese taxi booking app operator Japan Taxi. The company bought parking start-up Parking Square and acquired local carpool startup Luxi for 24.8 billion won. This year, it bought several taxi companies.

Kakao Mobility has invested or acquired companies that are related to its main business, mobility service. Logistics is a totally different business from the one it has been doing thus far. The company is reviewing the acquisition of Logen to find its new growth engine.

According to the company’s regulatory filing, Kakao Mobility has assets of around 240 billion won and cash and cash equivalents of about 35.3 billion won as of the end of last year. The company’s debt ratio stands at nine percent, meaning it has a positive financial structure. However, Kakao Mobility has recorded operating losses over the last two years. It recorded an operating loss of 10.6 billion in 2017 and 21 billion won in 2018. The company may review the possibility of acquiring Logen with a financial investor, like it received an investment from a TPG-led consortium.

South Korea’s e-commerce platform WeMakePrice seems to review an acquisition of a logistics company as well to build its own distribution network. The nation’s number one e-commerce company Coupang made a success by establishing its own logistics network. Wemakeprice may improve its quality of its delivery service by doing so. The company may also need to grow in size through M&A to wrestle with domestic retail giants like Lotte and Shinsegae, who has been putting efforts into their e-commerce businesses. Wemakeprice participated in Woongjin Group’s book distribution unit Booxen in July, although it walked away from the deal.

The problem is Wemakeprice’s weak financial structure. Wemakeprice recently escaped from impaired capital status thanks to 120 billion won investment from South Korean private equity firm IMM Investment. “Wemakeprice’s interest in an acquisition deal, despite its limited capital flexibility, shows its deep concern on the new growth engine, amid a fiercer competition in the e-commerce market,” said an industry source.

It is unclear whether the two companies will actually participate in the bid. They are expected to mull over their capital flexibility and synergy effects of the acquisition from now on. Logen has an asset-light business model. The logistics company’s subcontracting system and insufficient investments in facilities are some of issues that should be dealt with.

(By reporter Kim Hye-ran)