이 기사는 2020년 01월 23일 08:00 thebell 에 표출된 기사입니다.

South Korea’s private equity (PE) firm IMM Investment will acquire Dreamline, a broadband service provider, to bet on the growth potential of internet data center (IDC) and create synergies with Dreamline’s subsidiary Dreammark 1.

IMM Investment’s acquisition of Dreamline started with its investment in Dreammark 1. The PE firm participated in 24.5 billion won worth rights issue in October of 2019, which enabled the PE firm to own a 49 percent stake and Dreamline to own a 51 percent stake in Dreammark 1. IMM Investment participated in the deal via its special purpose company (SPC).

The PE firm had been seeking infrastructure investment opportunities prior to the rights issue of Dreammark 1. IMM Investment was especially interested in the expandability of communication and IDC business. According to industry sources, the number of IDCs in the country increased from 113 in 2013 to 145 in 2016, but they are still in short supply. Companies have increasingly built IDCs for their own services, while there aren’t enough IDCs for ordinary clients.

At that point, Dreammark 1 grabbed IMM Investment’s eyeballs. Dreammark 1 was established in December of 2016 as Dreamline E&C. Its main businesses include IDC infrastructure, network service, security service, contents delivery network (CDN) service, and management service provider (MSP) service.

It is said that the PE firm’s investment in Dreammark 1 went smoothly. Korea Investment Private Equity (KI PE) owns management rights of Dreammark 1 while IMM investment participated in the deal as a minority shareholder.

IMM Investment offered KI PE the M&A of Dreamline to achieve synergies between Dreammark 1 and Dreamline. The PE firm was aware of KI PE’s attempt to sell Dreamline in 2018, which was halted during the process.

“IMM Investment thinks IDC and communication business as a promising investment opportunity, and this has led its investment in Dreammark 1, followed by Dreamline. I think the PE firm thought Dreammark 1 can expand its business through Dreamline’s nationwide networks,” said an M&A industry source.

IMM Investment is expected to maintain Dreamline’s current businesses, including communication tower business service and private leased line service and invest infrastructure to expand the IDC business.

IMM Investment is likely to sign a share purchase agreement (SPA) with KI PE within this week. Up for sale are an entire stake in the broadband operator owned by KI PE, a 26.22 percent stake owned by SeAH Networks and a 9.44 percent stake owned by SeAH Holdings. SeAH Group exercised a tag-along right on its stake.

Reportedly, KI PE and SeAH Group’s combined share of Dreamline is around 90 percent of the total number of issued shares. KI PE and IMM Investment are said to have valued a 100 percent stake of the company at around 100 billion won, which makes the size of the deal to be approximately 90 billion won. Application to receive approval from the Ministry of Science and ICT on the change of its largest shareholder will take place at the end of this month or the beginning of next month.

(By reporter Kim Byung-yoon)