VIG Partners completes acquisition of Preedlife Private equity firm bets on growth in funeral industry
Translated by Ryu Ho-joung 공개 2020-06-29 08:01:22
이 기사는 2020년 06월 29일 08:00 thebell 에 표출된 기사입니다.
South Korean private equity firm VIG Partners has completed the acquisition of a controlling stake in Preedlife on June 25, according to sources, creating the country’s largest funeral service provider.VIG’s investment in the funeral industry dates back to 2016 when the firm bought the mid-sized funeral service company Jounlife. It has since made two add-on acquisitions of smaller businesses – Kumkang Mutual Aid and Modern – in 2017 and 2019 respectively.
The acquisition of Preedlife, the number one player in the industry, was a result of VIG’s years-long efforts to build a strong relationship with the company’s management. VIG approached Preedlife six years ago because it thought growing in size by combining with a bigger company was crucial to better position its funeral service business against the backdrop of industry consolidation.
VIG plans to merge Jounlife into Preedlife. The combined entity will have 1.26 trillion won ($1.0 billion) in assets and 1.5 million members, the largest in the country’s funeral industry, while its accumulated premium income is expected to stand at 1.15 trillion won.
Both Preedlife and Jounlife have strong financial profiles. At the end of 2019 the risk-based capital (RBC) ratio and debt-to-asset ratio were 105 percent and 95 percent for Preedlife and 114 percent and 88 percent for Jounlife, compared to the industry average of 91 percent and 108 percent.
Preedlife, which will become even bigger after the merge, is expected to see a more rapid pace of profitability growth in the future. Especially, apart from operating income growth, income from investment of premiums – which is also critical for profitability – could increase exponentially as the company’s accumulated premium income rises faster than before the combination.
The funeral industry in the country has continued to grow, with total premium payments reaching 5.8 trillion won and the number of members using such services surpassing 6 million at the end of 2019, according to data from the Fair Trade Commission.
Boram Sangjo Group, the second largest player in the industry, also has recently acquired a smaller rival, which will increase the accumulated premium income of the combined entity to 1.02 trillion won. Its RBC ratio and debt-to-asset ratio are estimated at around 88 percent and 113 percent respectively.
Preedlife is the second investment by VIG’s fourth blind-pool fund that closed earlier this year at 950 billion won. The fund’s first investment was in education service provider D.Share.
(Reporting by Hee-yeon Han)
< 저작권자 ⓒ 자본시장 미디어 'thebell', 무단 전재, 재배포 및 AI학습 이용 금지 >
관련기사
best clicks
최신뉴스 in 전체기사
-
- '재무개선' AJ네트웍스, 조달비용 '확' 낮췄다
- '9년만에 엑시트' 한앤코, 한온시스템 거래구조 살펴보니
- 한국타이어앤테크놀로지, 한온시스템 인수한다
- [수술대 오른 커넥트웨이브]2대주주 지분매입 나선 MBK, 주식교환 카드 꺼냈다
- [이사회 모니터]이재용 에이비프로바이오 대표, 바이오·반도체 신사업 '드라이브'
- 와이투솔루션, 주인 바뀌어도 '신약' 중심엔 美 합작사 '룩사'
- 아이티센, 부산디지털자산거래소 본격 출범
- 아이에스시, AI·데이터센터 수주 증가에 '날개'
- [이사회 모니터]서정학 IBK증권 대표, ESG위원회도 참여 '영향력 확대'
- SW클라우드 '10주년' 폴라리스오피스, “초격차 밸류업”