The sale of South Korea’s largest face masks manufacturer, Welkeeps, is likely to be accelerated as negotiations are proceeding well with potential buyers, industry sources said on Friday (November 6).

A controlling stake in the company is being sold through a de-facto limited competitive bidding, led by Samjong KPMG, with a preferred bidder expected to be announced as early as next month. The sale process is being carried out at a relatively quick pace because of strong interest by investors in the mask maker.

Founded in 2010, Welkeeps specializes in face masks that are designed to protect from fine dust and splash contamination. With its annual production of 120 million masks – which was equivalent to a third of total demand in the country before the onset of the Covid-19 pandemic – Welkeeps has maintained a dominant position in the market.

While there is a possibility that some market share may have been taken by new entrants, the company’s revenue is believed to have skyrocketed on the back of surging demand for masks during the pandemic, and its diversified sales channels.

Industry insiders have mixed views on the company’s appeal from an investment perspective. Welkeeps is expected to post record high earnings before interest, tax, depreciation and amortization (EBITDA) of 100 billion won ($90 million) this year, but the mask industry is likely to face an oversupply. Some market insiders said that the company’s controlling ownership should be valued at an EBITDA multiple of 2-3 times.

Other industry sources said demand for masks will remain strong even after the end of the pandemic and the company could be valued at an EBITDA multiple of 7-10 times.

“Investors have a variety of views on the valuation of Welkeeps,” said one source. “A potential buyer which could offer a satisfactory price for the seller will be the winner.”

Apart from selling masks under its own brand, Welkeeps also operates an original equipment manufacturing business. The company has rights to import and sell U.S. manufacturer GOJO’s hand sanitizer Purell in South Korea.

A controlling stake in Welkeeps is for sale, but chief executive Park Jong-han has reportedly not decided whether to sell any of his share. (Reporting by Ar-rum Rho)