이 기사는 2021년 06월 25일 08:10 thebell 에 표출된 기사입니다.

Kakao Commerce, which is set to be merged with its parent company Kakao Corp in September, was valued at approximately 5.2 trillion won ($4.6 billion).

Kakao Corp, a South Korean tech giant, said in a filing on Tuesday that it would purchase 93,193 shares in Kakao Commerce for about 18.2 billion won from the unit’s chief executive Hong Eun-taek.

If the transaction is completed on Friday, Kakao Commerce will be 100% owned by Kakao Corp and then will be ceased to exist after being merged with its parent company. The filing came after media reports about the planned merger last week. In a separate filing on the same day, Kakao Corp said the merger was approved by its board of directors on Tuesday.

The transaction put the commerce arm’s equity value at about 5.2 trillion won, which represents 10.2 times book value given the unit’s net assets of 510 billion won at the end of 2020. The purchase price also represents 32 times earnings before interest, taxes, depreciation and amortization (EBITDA).

Traditional valuation metrics such as price-to-book and enterprise value-to-EBITDA are sometimes not suitable to be used to value ecommerce companies as they tend to grow rapidly and many of them have no positive cash flow.

Instead, the price-to-gross merchandise value (P/GMV) ratio is often used in the ecommerce sector. South Korea’s Coupang and Naver have P/GMV ratios of 2.3 times and 0.5 times, respectively. It is estimated that US ecommerce giant Amazon and China’s Alibaba have P/GMV ratios of 1.5 times and 0.3 times.

Analysts’ estimates of Kakao Commerce’s value ranged from 2.9 trillion won to more than 10 trillion won. The 5.2 trillion won valuation is just the middle of this range.

Before Kakao Commerce is merged with its parent company, its fashion division will be spun off to be merged with online fashion platform Zigzag, which was acquired by Kakao Corp in April. The spin-off will reduce the commerce unit’s value.

The spin-off ratio has been set at 1 (Kakao Commerce) to 0.2096159 (new entity), which put the fashion division’s value at about 1 trillion won. (Reporting by Choong-hee Won)