Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Event-Driven

Daesung Industrial Gases is up for sale. Sale price of this buyout deal is estimated at around ₩1.5tril. The gas supplier is owned by a consortium led by Goldman Sachs (62% stake) and the gas supplier’s parent Daesung Group Partners Co. (38% stake). The stakeholders of Daesung Industrial Gases sent the letter to invite buyers to the auction and reportedly received preliminary bids from more than 10 industrial companies and private equity funds at home and abroad. The stakeholders are planning to shortlist preferred bidders within next week. They are planning to complete this sale process by next February. Much attention is on SK Holdings who is viewed as the strongest contender in the bidding race.* In Part 1 (as below), I summarized this buyout deal with valuation related issues. In Part 2, I will specifically look into SK Group's intention to use this buyout deal to accelerate and facilitate its own restructuring process involving SKT split-up and SK Holdings+SKT Holdco merger.

Daesung Industrial Gases is up for sale. Sale price of this buyout deal is estimated at around ₩1.5tril. The gas supplier is owned by a consortium led by Goldman Sachs (62% stake) and the gas supplier’s parent Daesung Group Partners Co. (38% stake). The stakeholders of Daesung Industrial Gases sent the letter to invite buyers to the auction and reportedly received preliminary bids from more than 10 industrial companies and private equity funds at home and abroad. The stakeholders are planning to shortlist preferred bidders within next week. They are planning to complete this sale process by next February. Much attention is on SK Holdings who is viewed as the strongest contender in the bidding race.* In Part 1 (as below), I summarized this buyout deal with valuation related issues. In Part 2, I will specifically  look into SK Group's intention to use this buyout deal to accelerate and facilitate its own restructuring process involving SKT split-up and SK Holdings+SKT Holdco merger.

Daesung Industrial Gases Buyout Part 1 - Deal Summary and Valuation Issue

South Korea

Deutsch Motors Inc. operates automobile dealership for new and used cars.  The Company also rents and leases the motor vehicles and provides after-sales services.  Deutsch Motors' cars include BMW and BMW's Mini.

The Leadcorp, Inc. specializes in small-scale consumer financing. The Company also distributes petroleum products and operates gas stations and highway rest stop businesses in Chungcheong region.

Lotte Himart Company, Ltd. offers retailing and distribution services for consum er electronics and household appliances.  The Company offers a wide range of ele ctronic goods including TV, cell phones, computers, printers, GPS, digital camer as and MP3 as well as household appliances including refrigerators, microwaves, hair dryers and vacuum cleaners.

Kolao Holdings retails new and used cars, and provided repairs and maintenance services in Laos.  The company also retails motorcycles and automobile parts.

LS Networks Co., Ltd. manufactures leather and athletic shoes, sports apparel, golf accessories, and leisure items.  The Company also operates a building leasing business.

Seobu T&D operates a truck terminal and gas stations. The Company also provides freight and real estate leasing services.

Shinsegae International Co., Ltd. was spun off from Shinsegae in 1996.  The company imports and distributes famous foreign brands and manufactures/distribut es domestic brand.  The Company's line of business includes the wholesale distribution of men's and women's apparel.

Bubang Co., Ltd manufactures and distributes household electrical appliances, especially rice cooker and steamer.

Cuckoo Homesys Co. Ltd. manufactures kitchen appliances. The Company produces and sells electric pressure cookers, dishwashers, blenders, water purifiers, and other products. Cuckoo Homesys also provides kitchen appliances exporting services. Cuckoo Homesys markets its products worldwide.

YES24 Co.,Ltd is an on-line retailer.  The company markets and sells books. The company also provides online advertising service.

Auto Italia Holdings Limited distributes brand-name products including motor vehicles. The Company serves customers in Hong Kong, Macau, mainland China, and elsewhere in Asia.

International Housewares Retail Company Limited operates retail houseware retail stores. The Company offers customers a variety of houseware products in Hong Kong, Singapore, West Malaysia, China and Macau.

International Housewares Retail (1373 HK)

Guangzhou Canudilo Fashion & Accessories Company Limited designs and develops own-brand high-end men's clothing, brand promotion, retail management and acts as a sales agent of international brands of apparel products. The Company's main product is high-end men's clothing.

Guangzhou Canudilo Fshn And Acsrs (002656 CH)

Shan-Loong Transportation Co., Ltd. transports containers.  The Company also operates in the auto repairing, warehousing, and gas station businesses.

Sportsman's Warehouse Holdings Inc. operates as a holding company. The Company, through its subsidiaries, provides sporting goods, sporting equipment, bicycles, footwear, electronics, and apparels. Sportsman's Warehouse distributes its products throughout the United States.

The Cato Corporation and its subsidiaries operate and manage stores in the United States.  The stores, under the names Cato, Cato Fashions, Cato Plus, and It's Fashion!, feature women's apparel and accessories for juniors, misses, and large sizes.  The Company's apparel includes dresses, careerware, coats, hosiery, shoes, handbags, and other related items.

China Harmony Auto Holding Limited is a dealership group that deals exclusively in luxury and ultra-luxury passenger vehicles in China. The Company's dealership outlets are located in populous and affluent cities in China.

SUNDAY CO., LTD. operates a chain of home center stores which specializes in providing home improvement products, leisure goods, and sundry goods.  The Company has stores in primarily Aomori Prefecture, and also in Hokkaido and the Tohoku region.

Mulsanne Group Holding Limited offers omni channel branding and marketing services. The Company offers online advertising, social media campaign, and other services. Mulsanne Group Holding provides its services throughout China.

Laox CO., LTD. operates a chain store known as Laox specialized in household appliances and computers based in Kanto region.  The Company also sells import goods, watch, and musical instruments.

Daesung Industrial Co., Ltd. purchases and distributes petroleum and gas products through its gasoline stations and propane gas filling stations. The Company also distributes electricity, offers construction services, and manufactures industrial machinery.  In addition, Daesung Industrial invests in venture capital through its subsidiary.

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Daesung Industrial (128820 KS)

Daesung Industrial Gases Buyout Part 1 - Deal Summary and Valuation Issue

Daesung Industrial Gases is up for sale. Sale price of this buyout deal is estimated at around ₩1.5tril. The gas supplier is owned by a consortium...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)