Private equity (PE) firm H&Q has reported continuing interest in the sale process for its portfolio company JobKorea, with final bids submitted on Monday (February 22).
CVC Capital Partners, TPG Asia, MBK Partners and Affinity Equity Partners reportedly submitted their binding offers, amid intense competition for the online recruiting firm.
H&Q will start reviewing price and non-price terms offered by shortlisted bidders, industry sources said on Tuesday (February 23). Some market insiders said the company may select its preferred bidder after going through a progressive deal as multiple financial investors participated in the bidding.
H&Q announced seven shortlisted bidders in mid-December 2020 and chose potential buyers with a high degree of certainty in seeing the deal through. They were then allowed to conduct a detailed due diligence.
There were some concerns that the buyer could have control over the deal, as most of the shortlisted bidders are financial investors. However, the next steps in the process are likely to happen smoothly, including the selection of a preferred bidder, as many of the offers meet H&Q’s expectation of an enterprise value/earnings before interest, taxes, depreciation and amortizations of around 15 times.
“A tug of war between the seller and an acquirer was expected at the beginning of the deal as the seller has sought a high price,” said an industry source. “The seller was also expected to have difficulties responding to potential buyers because many of the shortlisted bidders were allowed to conduct detailed due diligence. But the seller has responded well to potential buyers’ request for documents and encouraged them to finish the race.”
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. This should be attractive to potential buyers, industry watchers said.
With the sale process approaching the finish line smoothly, market insiders are paying attention to H&Q’s exit from the company. JobKorea has been one of the major assets which will determine the performance of H&Q’s third blind-pool fund, which invested in JobKorea in 2013 and 2015, as well as Il Dong Pharmaceutical in 2015, LS Cable & System Asia in 2015, Playtime Group in 2015 and HK inno.N in 2018.
If the PE firm strikes a deal this year, it will exit JobKorea eight years after its first investment. 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. (Reporting by Ar-rum Rho)