이 기사는 2021년 04월 01일 08:08 thebell 에 표출된 기사입니다.

The sale of South Korea’s largest vegetable oils and animal fats manufacturer Dae Kyung Oil & Transportation (DK O&T) is attracting keen attention from market players, with SK Energy considered as one of the potential buyers.

DK O&T is sounding out strategic and financial investors ahead of its public auction process, industry sources said on Tuesday. The deal is led by Citigroup Global Markets Securities.

Strategic and financial investors are highly likely to form a consortium for the race because a secondary deal is unlikely given that the seller wants an enterprise value/earnings before interest, taxes, depreciation and amortization multiple of 17~18 times. The seller also prefers a strategic investor with a longer-term view.

Market insiders are paying attention to SK Energy, which reportedly formed a consortium with a private equity firm to purchase DK O&T, although private negotiations between the two sides fell through due to a valuation gap. They reportedly valued the company at the 200 billion won ($176 million) range.

Apart from SK Energy, oil refiners, including SK Energy and GS Caltex, and animal feed manufacturers such as Cargill are considered potential buyers.

DK O&T is attracting attention from feed companies thanks to its leading position in the animal fats market. Founded in 1995, DK O&T is the country’s largest animal fats manufacturer with a market share of around 40%. The wholesale and distribution of eco-friendly energy using vegetable oils is expected to be the basis for the company’s growth.

The company also has storage infrastructure with around 60 tanks dedicated to maintenance and transportation. Prospective buyers are expected to conduct due diligence on those facilities.

Market players estimate the company to be worth 250 billion won to 260 billion won, but it may be sold at a higher price if the auction attracts sufficient interest.

STIC Investments acquired a 70% stake in DK O&T for 94.5 billion won in June 2017. (Reporting by Ar-rum Rho)