A SK Rent-a-Car branch for leasing used cars (Courtesy of SK)
Affinity Equity Partners will buy a 100% stake in South Korea’s second-largest car leasing company SK Rent-a-Car Co. for 820 billion won ($591.4 million), marking the Asian buyout firm’s first major acquisition of a Korean asset in three years.
The Hong Kong-based investment firm, which became the preferred bidder in April, (link!!!!) will sign a stock purchase agreement with the car leasing company’s parent SK Networks Co. within a month and complete the transaction by Nov. 28 of this year, SK Networks said in its regulatory filing on Thursday.
Affinity and SK Networks have fully agreed on the future direction of SK Rent-a-Car’s strategic growth and development, said the buyout firm’s Partner Min Myung-chul, or Charles Min, who became the Seoul office head last year.
Affinity will raise the corporate value of the car leasing company and strengthen the brand’s leadership in the auto rental industry through proactive investments, Min added.
The private equity firm plans to retain the company’s current employees, expand the options for car rental periods and payments and maximize customer convenience with various services.
SK Networks, a unit of Korea’s No. 2 conglomerate SK Group, acquired a 42% stake in AJ Rent-a-Car for 300 billion won in 2018 and merged the company with its car rental business to create SK Rent-a-Car in 2019.
SK Networks, which had owned a 72.9% stake in SK Rent-a-Car, held a tender offer with a 120 billion won injection last August to secure 100% of the car leasing company.
SK Rent-a-Car posted a 121.9 billion won operating profit and 1.4 trillion won revenue last year, respectively up 28.3% and 12.5% on-year.
If clinched, the deal will mark Affinity’s first major acquisition of a Korean asset in three years.
The buyout firm, which sold Korea’s Oriental Brewery with New York-baed PE giant KKR & Co. to the Belgium-based Anheuser-Busch InBev SA for $5.8 billion in 2014, more than three times the purchase price in 2009.
Affinity has been slow in the Korean market since it bought the food delivery platform Yogiyo with GS Retail Co. for 800 billion won in 2021.
The PE firm failed to secure more than 95% of Korean food container maker Lock&Lock Co. through two rounds of tender offers earlier this year. It is in the process of an equity swap between its Korean entity and Lock&Lock to own a 95% stake or more and ultimately delist the household product maker from the main Kospi.
By Ji-Eun Ha
hazzys@hankyung.com
Jihyun Kim edited this article.
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