HK-based PE firm Affinity pays $535m for majority stake in Korea’s ServeOne
Hong Kong-based private equity firm Affinity Equity Partners has agreed to acquire a majority stake in South Korea-based ServeOne, a management, repair and operation (MRO) unit under LG Group, for 602 billion won ($535 million).
S&I Corp, the LG subsidiary that directly owns ServeOne, will retain a 39.9 per cent stake in the company.
In September 2018, Korean media had first reported that LG was in talks with Affinity Equity Partners to sell the MRO business. The chaebol had then said that it was seeking foreign stakeholders for the unit but had not made a decision at that time.
Upon closing the deal, Affinity is expected to help ServeOne expand its global outreach to countries like China and Vietnam.
ServeOne was said to generate almost 80 per cent of its sales from internal business deals. However, the Korean government has recently imposed more pressure on intra-group deals in local chaebols, causing S&I to pursue the sale.
ServeOne was spun out of S&I in December 2018.
Affinity, which was spun out of UBS Capital Asia Pacific in 2004, has to date completed $15 billion in aggregate transaction value, it says on its website.
In South Korea, the firm has recently backed outsourcing call centre service firm UBase and retailer Shinsegae. The latter was an investment in partnership with BlueRun Ventures in a 1 trillion won ($887 million) deal.
The Hong Kong private equity fund manager is also a shareholder in Loen Entertainment and Kyobo Life Insurance. It has made exits from Korean companies such as MK Electron, HiMart, The Faceshop, Korea Digital Satellite Broadcasting, Oriental Brewery and Pulmuone Foods.