NPS, Teachers' Union, Agri Coop back $266 in SkyLake's TmaxSoft buyout

South Korea’s major institutional investors including the National Pension Service, the Korea Teachers’ Credit Union (KTCU) and the National Agricultural Cooperative Federation (NACF) have invested 330 billion won ($265.9 million) to back SkyLake Equity Partners’ acquisition of the country’s No. 1 middleware company TmaxSoft Co.

According to investment banking sources on Thursday, the Seoul-based private equity firm acquired a 60.9 percent stake in TmaxSoft plus 100 billion won worth convertible bonds for 670 billion won via a mix of blind fund, an acquisition loan and a joint investment fund.

SkyLake Equity Partners utilized 140 billion won from the blind fund it launched in 2020, 200 billion won from an acquisition loan and the remaining 330 billion won from an investment fund joined by NPS, KTCU and NACF.

KTCU injected 100 billion won, and NPS’ co-investment fund and NACF the rest.

NPS and KTCU are major limited partners of SkyLake’s blind fund launched in 2020.

The institutional investors focused on TmaxSoft’s dominating market share of about 40 percent and stable growth potential. Sellers will have a call option for stock purchase, and investors a put option for early repayment for safe cashing in on their investment.

Institutions can expect an internal rate of return from investments at 20 percent.

Middleware is necessary software for operation of an application. The middleware market has continued growth at an annualized rate of 4.4 percent for the past five years.

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