Key Takeaways
- • CL Asset Management, a private equity management company headed by former Woori Bank President Kwon Kwang-seok, is teaming up with resort and golf operator Dersienna to bid for Golf Zone County, according to Maeil Business Newspaper.
- • The sale price for 100% of the stake is about 800 billion won, based on an enterprise value of roughly 1.75 trillion won after excluding a 950 billion won net deposit.
- • CL Asset Management and The Ciena Consortium are reportedly ahead in the process, while global PEF manager Warburg Pincus remains in the contest.
- • Warburg Pincus has reportedly weakened its willingness to bid due to the sharp rise in the won, which raises dollar-denominated acquisition costs for foreign funds.
- • MBK Partners, the largest shareholder with 58.4% of Golf Zone County, is negotiating individually with the bidders and has not named a preferred buyer.
Summary
CL Asset Management, a private equity fund management company established in 2020 and headed by former Woori Bank President Kwon Kwang-seok, has joined with resort and golf course operator Dersienna to pursue the acquisition of Golf Zone County. According to the investment bank industry as reported on October 21, the sale is expected to become a two-way race, with global PEF manager Warburg Pincus still active in the takeover contest.
MBK Partners, the largest shareholder in Golf Zone County, is negotiating separately with the two leading candidates and has not indicated a preferred bidder. CL Asset Management and The Ciena Consortium are reported to be ahead on the schedule and are assembling acquisition financing by approaching securities firms and other financial companies. CL Asset Management is reportedly raising a total of 850 billion won, comprising 350 billion won in equity, 450 billion won in loans, and up to 50 billion won in limit loans, to prepare a trading bid. Dersienna is reportedly leading the financing effort given its strong willingness to buy, according to an IB industry official.
Golf Zone County's valuation is estimated at about 1.75 trillion won on an enterprise value basis. Excluding a net deposit of 950 billion won, the sale price for 100% of the stake is about 800 billion won. Warburg Pincus has reportedly become less willing to pursue the deal since the start of the review, as the rapid appreciation of the won in the second half of the year increases the dollar cost of acquisition funds for foreign investors.
CL Asset Management's recent ownership structure includes real estate developer Mine 42, which acquired a 90% stake and management rights, with Mine 42 holding 50% and Mine 42 CEO Yoo Soo-jin holding 40% in a personal capacity. Chairman Kwon directly acquired a 10% stake. Kwon previously served as vice president of Woori Bank's IB Group, became CEO of Woori PE Asset Management at the end of 2017, led the acquisition of Aju Capital and Aju Savings Bank, and later served as CEO of the Korea Federation of Community Credit Cooperatives and president of Woori Bank. He is currently an outside director of Korea Zinc and an advisor to Lotte Card.
MBK Partners invested 114 billion won through its fourth blind fund in 2018 for a 50% stake in Golf Zone County and bought an additional 70 billion won of convertible preferred stock the following year. An IPO planned for 2022 was canceled amid market contraction, and MBK has obtained drag-along rights to sell Golf Zone Holdings' shares alongside its own. The current split is 58.4% for MBK Partners (54.83% ordinary shares and 3.54% convertible preferred) and 41.6% for Golf Zone Holdings. Golf Zone County operates 21 golf courses nationwide. Sales last year were 285.2 billion won, down 3.1% from 294.3 billion won, while operating profit fell 11.3% to 81.1 billion won, leaving an operating margin of 28.4%.
MBK Partners, the largest shareholder in Golf Zone County, is negotiating separately with the two leading candidates and has not indicated a preferred bidder. CL Asset Management and The Ciena Consortium are reported to be ahead on the schedule and are assembling acquisition financing by approaching securities firms and other financial companies. CL Asset Management is reportedly raising a total of 850 billion won, comprising 350 billion won in equity, 450 billion won in loans, and up to 50 billion won in limit loans, to prepare a trading bid. Dersienna is reportedly leading the financing effort given its strong willingness to buy, according to an IB industry official.
Golf Zone County's valuation is estimated at about 1.75 trillion won on an enterprise value basis. Excluding a net deposit of 950 billion won, the sale price for 100% of the stake is about 800 billion won. Warburg Pincus has reportedly become less willing to pursue the deal since the start of the review, as the rapid appreciation of the won in the second half of the year increases the dollar cost of acquisition funds for foreign investors.
CL Asset Management's recent ownership structure includes real estate developer Mine 42, which acquired a 90% stake and management rights, with Mine 42 holding 50% and Mine 42 CEO Yoo Soo-jin holding 40% in a personal capacity. Chairman Kwon directly acquired a 10% stake. Kwon previously served as vice president of Woori Bank's IB Group, became CEO of Woori PE Asset Management at the end of 2017, led the acquisition of Aju Capital and Aju Savings Bank, and later served as CEO of the Korea Federation of Community Credit Cooperatives and president of Woori Bank. He is currently an outside director of Korea Zinc and an advisor to Lotte Card.
MBK Partners invested 114 billion won through its fourth blind fund in 2018 for a 50% stake in Golf Zone County and bought an additional 70 billion won of convertible preferred stock the following year. An IPO planned for 2022 was canceled amid market contraction, and MBK has obtained drag-along rights to sell Golf Zone Holdings' shares alongside its own. The current split is 58.4% for MBK Partners (54.83% ordinary shares and 3.54% convertible preferred) and 41.6% for Golf Zone Holdings. Golf Zone County operates 21 golf courses nationwide. Sales last year were 285.2 billion won, down 3.1% from 294.3 billion won, while operating profit fell 11.3% to 81.1 billion won, leaving an operating margin of 28.4%.
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