이 기사는 2019년 12월 17일 08:00 thebell 에 표출된 기사입니다.

2019 has been a year of ups and downs for the homegrown private equity firm Hahn & Company.

A notable exit and successful fundraising

Hahn & Co. got a good start, selling Woongjin Foods to Taiwanese food conglomerate Uni-President Enterprises for 260 billion won ($229 million) earlier this year. This is more than double the price at which the private equity firm acquired a controlling stake in the company back in 2013 from Woonjin Group. The feat was a result of a smart strategy by Hahn & Co., which led contenders to make a higher offer through progressive bidding.

Meanwhile, the private equity firm raised total $3.2 billion for its third buyout fund and a co-investment fund. The capital pool is nearly triple the size of its second fund at $1.2 billion, which resulted in an increase of the asset managed by Hahn & Co. to over 8.1 trillion (about $7 billion), a rapid growth compared to its first $740 million blind-pool fund launched in 2011.

It is also notable that many LPs that already invested in the firm’s previous funds have participated in the latest fundraising, which shows existing investors’ strong confidence in Hahn & Co.

A first attempt at acquiring a financial firm ended in vain

There were also bad moments for Hahn & Co., among which was the Lotte Card deal, its first attempt at acquiring a financial services firm. Initially the private equity firm was selected as the preferred bidder in May, with its aggressive bidding. However, tax evasion allegations raised against Hahn & Co. regarding the sale of one of its other portfolio companies botched the deal.

Lotte Group, the seller of Lotte Card, needed to expedite the sale process to complete the transaction by October, while the legal conflict involving the buyout firm could have delay regulatory approval. This led Lotte Card to change its mind and grant the preferred bidder status to MBK Partners which made the second highest offer. The Seoul Central District Prosecutors’ Office has dismissed allegations against Hahn in July, but it was too late to salvage the deal.

Eyes on Hahn & Co.’s next moves

Hahn & Co.'s dealmaking activity has been slow this year compared to in 2018 when the buyout firm bought SK Shipping for a whopping $3.7 billion from SK Group.

According to data compiled by the bell plus, the second largest deal made by Hahn & Co. in 2019 behind the sale of Woonjin Foods is an acquisition of Lahan Hotel Pohang (formerly Best Western Pohang) for roughly 60 billion won ($51 million). The firm also bought Le Win Hotel in Jeonju for 10 billion won ($8.5 million), all of which are considered part of the bolt-on strategy to strengthen its portfolios in the hospitality sector after its acquisition of a 100 percent stake in Lahan Hotels (formerly Hyundai Hotel) back in 2017.

Market watchers are focusing on Hahn and Co.’s exit activity next year, especially in the cement industry. The private equity firm acquired Daehan Cement in 2012 and also bought Ssangyong Cement Industry, which later became the parent company of Daehan Cement.

Auto parts maker Hanon Systems, which Hahn & Co. bought in 2015, is also one of the candidates that could be put up for sale next year.

“Hanon Systems, with its strong credit rating, recently acquired Magna International’s FP&C business unit (Fluid Pressure & Controls), continuing efforts to diversify its client base. This could help develop a positive atmosphere for an exit,” said an industry source. “It is also worth watching [Hahn & Co’s] next investment moves, with overall dealmaking activity in the domestic M&A market continuing to slow,” he added.

(By reporter Kim Byung-yoon)