이 기사는 2020년 03월 30일 08:00 thebell 에 표출된 기사입니다.

A sale process of South Korea’s toymaker Young Toys has been delayed. Although the toymaker and a consortium composed of MiraeN and NVestor have narrowed their opinion gap, business uncertainties have heightened due to the spread of the novel coronavirus.

South Korea’s education and publishing company MiraeN and Hong Kong-based investment firm PAG Asia Capital have agreed to postpone the Young Toys M&A deal by a maximum of three months, sources familiar with the matter said on March 24. Last year, PAG decided to sell a 100 percent stake in the toymaker and selected a consortium composed of MiraeN, NVestor and Corstone Asia as a preferred bidder. The acquisition cost is reportedly around 200 billion won.

MiraeN has put a lot of effort into the acquisition of the nation’s biggest toymaker as it sees toys as its new growth engine. The publishing company has sought for new revenue model with the conventional education and publishing industry being in a decline. MiraeN has attracted its private equity arm NVestor and mid-sized private equity firm Corstone Asia as its financial investors. The consortium has already completed talks with two financial firms to use acquisition financing.

The MiraeN-led consortium initially planned to sign a stock purchase agreement (SPA) at the end of January after going through detailed due diligence and price negotiations. However, there has been a setback in the initial plan as some of Young Toys’ factories in China have been shut down due to the coronavirus. Despite MiraeN’s effort to reaccelerate the deal process, the spread of the coronavirus worldwide has halted the discussion between two parties amid heightened worries over the toymaker’s earnings performance.

PAG and the consortium have decided to postpone the deal until May, which is the peak season for the toy industry. The two parties will resume the discussion when quantitative data on the toymaker such as earnings become available. Considering both sides are willing to sit back down at the negotiation table, they are expected to enter into the SPA unless its earnings results change significantly. PAG acquired Young Toys from Hong Kong-based Headland Capital Partners for 220 billion won in 2015. PAG is not selling at loss though as it has collected 67 billion won in dividends until 2018. Having acquired Young Toys five years ago, PAG in fact is in a hurry to exit its investment in the toymaker.

The MiraeN-led consortium is likely to finish the race. “If PAG fails to sell Young Toys again, it may have to hold the company for an extended period of time” said an investment banking industry source, adding, “Given both sides have been participating in the negotiation seriously, the deal is likely to close unless [Young Toys’] earnings performance sharply deteriorates.”

(By reporter Jo Se-hun)