IMM PE signs deal to buy Hanssem's controlling stake, shares fall

[Photo provided by Hanssem]

IMM Private Equity (PE) signed a stock purchase agreement (SPA) to close the acquisition of a controlling stake of 37.8 percent in South Korea’s top furniture and home furnishing company Hanssem at 1.45 trillion won ($1.24 billion), the private equity fund said Monday.

The deal includes a 15.45 percent stake owned by Hanssem founder and Honorary Chairman Cho Chang-geol and the rest from his specially affiliated individuals amounting to 6.52 million common shares in Hanssem.

Investors were cool to the change in management amid deteriorated earnings.

Kospi-trading Hanssem shares fell 7.3 percent to close Tuesday at 108,000 won.

Hanssem on Friday disclosed operating income fell 18.5 percent on quarter to 22.6 billion won in the third quarter while sales were off 5.8 percent to 535.8 billion won.

The PEF has partnered with Lotte Group for the acquisition.

Lotte chipped in 300 billion won in hopes of offering its distribution network of Lotte Shopping and Lotte Himart to Hanssem to find new business opportunities. An official from IMM said Hanssem will go all-out to meet the needs of customers by diversifying products, shortening home renovation period and developing new materials.

“Hanssem maintains its top position in the (Korean) interior and furniture market by leading kitchen furnishing business,” IMM PE said. “Hanssem has developed design and products that can meet the various demands of customers, and has been leading the 35 trillion won worth interior and furniture market by providing high-quality furnishing and remodeling services.”

The PEF expects Hamssem to benefit from home furnishing fad amid the Covid-19 pandemic. The fund has a wealth of experience in boosting corporate value of acquired companies including W Concept Korea, Hollys Coffee, Taelim Packaging and Taihan Electric Wire.

“Hanssem has enhanced price transparency, improved service quality and implemented customer-centered after-sale services,” IMM said, adding that it will help the company cement its No.1 position in the Korean interior market by providing differentiated value to consumers.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]