Private equity firm H&Q has named Affinity Equity Partners as the preferred bidder for online recruiting firm JobKorea, industry sources said on Thursday (March 4).
A stock purchase agreement is being finalized by the two sides and a contract is expected to be signed soon. JobKorea is likely to be sold for enterprise value/earnings before interest, taxes, depreciation and amortizations (EV/EBITDA) of around 17 times, given its EBITDA stood at 52.7 billion won ($46 million) last year.
Affinity Equity Partners has reportedly valued JobKorea at 900 billion won, which is higher than market expectations. Given that the recruitment firm is currently in a net cash position, the equity value is said to be 950 billion won.
“Affinity offered a price that is way higher than the market had expected,” said an industry source, adding, “It could confidently offer the price as it has continued its efforts to win the race, including forming a consortium with a strategic investor.”
H&Q started the sale process by hiring Morgan Stanley as its sale manager in February 2020. It sent out invitation letters to potential buyers in October and about 10 of those firms participated in the first round of bidding in mid-December 2020.
Of seven shortlisted bidders, CVC Capital Partners, TPG, MBK Partners and Affinity Equity Partners submitted binding offers on February 22, amid intense competition.
H&Q changed the sale process to a progressive deal after the final round of bidding and received fresh offers from shortlisted bidders. It eventually decided to pick Affinity Equity Partners as its preferred bidder for JobKorea.
If the deal is completed this year, H&Q will exit JobKorea after eight years. It is estimated to have earned a money multiple of around 8.5 times its principal.
H&Q bought 49.9% of JobKorea from U.S. job-hunting service provider Monster Worldwide for $90 million in 2013 and the remaining stake for 110 billion won in 2015. If financed half of the acquisition price through acquisition financing and the remainder through its blind-pool fund.
JobKorea provides online job search services to customers with various needs, including those looking for internships, part-time jobs, full-time jobs and jobs after retirement. (Reporting by Ar-rum Rho)