Goldman Sachs to sell Korea’s food ingredient wholesaler stake
Jun-Ho Cha
9 HOURS AGO
Sun-In's factory in South Korea (File photo downloded from Sun-In's website) Goldman Sachs is set to sell its stake in South Korea’s leading food ingredient wholesaler in an estimated 120 billion won ($89.4 million) deal.
Goldman Sachs is seeking to unload its 20.6% stake in Sun-In Co with a schedule for preliminary bidding in the middle of this month to complete the deal by year-ed, according to investment banking industry sources in Seoul on Monday.
KPMG Samjong Accounting Corp., the South Korean member firm of KPMG, is a financial advisor for the sale.
Sun-In founded in 1987 is South Korea’s top distributor of bakery and western food materials with more than 7,500 stock-keeping units, which identify products, typically assigned by retailers or manufacturers, and over 23,000 corporate customers.
Its research and development talent and new product development capabilities are highly regarded in the industry, according to the sources.
HEALTHY EARNINGS
The company’s operating profit soared 50.2% to 44 billion won last year with sales up 12.7% to 234.9 billion won. It logged over 17% of earnings before interest, taxes, depreciation, and amortization (EBITDA) margins for the last three years while holding net cash of 120.1 billion won thanks to its debt-free management.
Goldman Sachs, which bought the stake for 34 billion won through its private equity unit in 2017, decided to sell the shares as the fund for the investment is poised to mature.
Sun-In’s corporate value was estimated at around low-to-mid 600 billion won based on its cash holdings and ten times its EBITDA, investment banking industry sources said.
The estimation put the US investment bank’s stake at around 120 billion won, according to the sources.
MAJOR PRIVATE EQUITY FIRMS INTERESTED
The food ingredient wholesaler’s rivals and other private equity funds are expected to take over the stake, the sources said.
Major private equity firms have been interested in Sun-In as investments in a company with such strong growth could result in a handsome profit, according to the sources.
Seoul-based Anchor Equity Partners, which bought a 46% stake in South Korea’s top medicine wholesaler Geo-Young Corp. for 150 billion won from Goldman Sachs based on a corporate value of 300 billion in 2013, sold the shares to private equity giant Blackstone Inc. based on its enterprise value of 1.1 trillion won in 2019.