이 기사는 2021년 11월 25일 08:06 thebell 에 표출된 기사입니다.

South Korea’s software group Tmax is on track to sell its most profitable business, TmaxSoft, with four potential buyers selected to advance to the final round of bidding, which is expected to take place next month.

Tmax and sale adviser Samjong KPMG late last month shortlisted cloud managed service provider Bespin Global and private equity firms MBK Partners, SkyLake Equity Partners and Macquarie Korea Asset Management out of more than 10 bidders to continue in the process. They have been conducting detailed due diligence over the past weeks.

Tmax has several affiliates including TmaxSoft, which has been acting as a cash cow for the group’s other less profitable businesses such as TmaxData and Tmax A&C.

When Tmax last year sounded out potential investors to raise money through TmaxSoft to ease liquidity pressure on the broader group, it received negative feedback from many of them, reportedly because of poor financial condition of the group’s other affiliates. They are said to have expressed concerns about other businesses’ financial burdens being transferred to TmaxSoft.

The group this time opted to sell a controlling stake in TmaxSoft to use the sale proceeds to support its struggling affiliates. This enabled potential buyers to focus on TmaxSoft’s fundamentals only.

The company’s strong market position and ability to generate cash are factors that appeal to potential buyers. TmaxSoft has recorded annual revenue of around 100 billion won ($84.3 million) in the past four years, with 44.6 billion won in revenue in the first half of this year. Revenue growth is expected to continue this year given that its revenue tends to be greater in the second half.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were 38.5 billion won in 2020, up by 6 billion won from a year earlier. TmaxSoft earned 11 billion won EBITDA in the first half of this year. Its EBITDA also tends to grow significantly in the second half.

TmaxSoft established a strong position in the global middleware market, with its software products used by more than 3,000 customers. Its web application server, JEUS, holds the biggest market share.

Some are concerned about a lack of the company’s future growth drivers. A few potential investors previously approached TmaxSoft about an acquisition, but they ultimately withdrew due to uncertainty about the company’s growth prospects, sources said.

TmaxSoft is said to put priority on ensuring a speedy sale, with the final round of bidding expected in December. (Reporting by Hee-yeon Han)