Global private equity (PE) firm Macquarie Korea Asset Management will acquire South Korean real estate and infrastructure operation & management (O&M) company YIDO, with a detailed due diligence process now reportedly underway.

Choi Jung-hoon, chief executive and the largest shareholder of YIDO, is in talks with Maquarie to sell a controlling stake in the company, industry sources said on Wednesday (January 27). Choi is likely to be left with the second-largest stake.

Founded in 2006, YIDO is an O&M platform company that pursues a value-adding strategy in management across different industry segments by targeting assets that became undervalued through previously poor management.

The firm focuses on sectors like environment, real estate, infrastructure and golf courses. Its revenue nearly doubled to 147.3 billion won ($132 million) in 2019, from 74.5 billion won in 2018, mostly due to the booming golf course business. Operating income rose from 6.6 billion won to 15.6 billion won during the same period.

Choi Jung-hoon, the eldest son of Daebo Group chief executive Choi Dung-kyu, became the largest shareholder of YIDO in 2015 with a 45% stake. Financial investors, including IMM Investment and Dominus Investment, own a combined 40% stake.

YIDO attempted to go public on the main KOSPI bourse last year through sale managers Mirae Asset Daewoo and Daishin Securities, but later postponed the plan.

The company raised 29 billion won from IMM Investment through a pre-IPO in 2018, making the financial investor the second-largest shareholder with a 19.48% stake.

Other financial investors, including SG PE, Medici Investment and Mirae Asset Daewoo, had shares in YIDO, but their stakes were purchased by Dominus Investment, which also bought some of Choi’s shareholding through a secondary investment.

Choi will keep his management rights after he becomes the second-largest shareholder. IMM Investment and Dominus Investment reportedly plan to sell their stakes to Macquarie if YIDO’s enterprise value and stock price are satisfactory.

Industry insiders expect the company to be valued at more than 300 billion won. (Reporting by Si-eun Park)

  • To continue reading, please sign in to your Capital Connect account. If you are not yet a member, please create an account here.