JC Partners closes deal to acquire MG Non-Life A Korean private equity firm has built relationships with limited partners through the deal

Translated by Kim So-in 공개 2020-04-20 08:00:19

이 기사는 2020년 04월 20일 08:00 더벨 유료페이지에 표출된 기사입니다.

South Korea’s private equity firm JC Partners has finally closed a deal to acquire MG Non-Life Insurance.

JC Partners has closed the deal to acquire MG Non-Life on April 14, according to industry sources. Also, on the same day, Woori Bank has arranged a refinancing for the acquisition, finishing up the deal process which took almost three years.

In the first half of 2018, Orix Private Equity, currently JC Partners, pushed ahead a capital increase of MG Non-Life. Then JC Partners started to lead the investment in the insurer after Lee Jong-chul, founder of JC Partners, branched out on his own from Orix PE in July 2018. Around that time, Jabez Partners, former largest shareholder of the non-life insurer, submitted its plan to improve risk-based capital (RBC) ratio by carrying out capital increase.

Orix PE initially planned to carry out its investment in MG Non-Life jointly with Mirae Asset Daewoo. Mirae Asset Daewoo could invest in the PE firm’s project fund and arrange the refinancing for the acquisition at the same time. However, the investor and arranger of the acquisition financing has been changed to Woori Bank, with the buyer of the non-life insurer changing to JC Partners.

JC Partners has faced many obstacles even after it took over the deal. It is said that the country’s financial regulator has made a thorough review of investors’ commitments to the project fund. In accordance with the move, JC Partners submitted supplementary documents for the eligibility screening of the large shareholder to South Korea’s Financial Supervisory Service (FSS) in early March after its initial document submission in October 2019.

The PE firm had to repeatedly submit documents due to a change in investors. JC Partners reportedly planned to receive money from Orix in Japan, but it didn’t proceed with the plan. The firm also reviewed a possibility to receive funds from Dominus Investment, which was abandoned as well.

As a result, Korea Federation of Community Credit Cooperatives (30 billion won), Woori Bank (20 billion won), Rich Planner Consulting (20 billion won) have committed to JC Partners’ 100 billion won worth project fund. Acuon Capital (20 billion won) and Aju Capital (10 billion won) also have participated. Separately, Woori Bank has arranged a 100 billion won refinancing for the acquisition to boost the non-life insurer’s RBC ratio. The total deal size amounts to 200 billion won.

The latest deal is likely to be meaningful to JC Partners as it has put much time into closing the deal and has built relationships with investors and the financial regulator that are likely to be the firm’s assets for its future activities.

“Market watchers have thought JC Partners, which was branched out from Japan-based Orix, has shallow pool of domestic investors,” said an investment banking industry source, adding that thanks to the latest deal, the firm has secured friendly limited partners, including KFCC, Woori Banks and capital firms, for its future investments.

(By reporter Rho Ar-rum)
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