Homeplus Express up for sale by MBK Partners

MBK Partners is selling Homeplus Express after a strong year of earnings through its online delivery service.

Homeplus Express' Mok-dong branch in wastern Seoul after renovations in May [YONHAP]

Homeplus Express has been put up for sale by the country’s top private equity firm, MBK Partners, a source with knowledge of the matter said on Monday.

A company spokesperson confirmed that a review of the trade sale opportunity is underway.

MBK Partners wholly owns the Korean hypermarket chain Homeplus and Homeplus Express, a smaller version that focuses on neighborhoods.

Morgan Stanley will distribute an investment teaser to about 10 potential domestic and international retail companies, online commerce firms and online platforms as early as this month, according to local media reports.

Founded in 2004, Homeplus Express is one of the "big four" in supermarket franchises targeting neighborhood customers along with GS The Fresh, Emart Everyday and Lotte Super, maintaining a market share of over 20 percent.

The company operates 300 offline stores across the country, with 75 percent located in greater Seoul.

The supermarket chain has benefited from the growing popularity of online orders of fresh produce and groceries with its quick commerce service that completes deliveries within an hour.

Revenue from the delivery service alone saw an increase of 53 percent between March 2023 to February 2024 compared to the same period a year prior, Homeplus Express said, while not disclosing the figures.

The chain is estimated to have generated around 1.2 trillion won ($870.5 billion) in revenue last year before interest, taxes, depreciation and amortization, or EBITDA, hovering around 100 billion won, according to a local news report.

Homeplus, meanwhile, cut its operating loss to 199.4 billion won between March 2023 to February 2024, down from 260.2 billion won during the same period a year earlier.

It posted 6.9 trillion won in revenue, up 5 percent on year, during the cited period, according to its financial statement.

Industry insiders said that the Homeplus Express sale will pique great interest from investors, as the supermarket chain has a nationwide network of both offline stores and online delivery capabilities.

BY CHOI HAE-JIN [choi.haejin@joongang.co.kr]