Gaming company NXC looks to unload stroller maker Stokke

NXC Corp., the holding company of South Korea’s Nexon Games Co., is looking to unload Stokke AS, a premium baby stroller brand, for around 700 billion won ($480 million) to capitalize on the recent birth rate rebound in the fast-aging country.

According to investment banking sources on Friday, NXC decided to put the baby carriage and crib manufacturer on the market in the second half of last year. It is now reaching out to potential buyers, including baby product makers and private equity firms, via accounting firms.

Stokke, often referred to as the Mercedes-Benz of strollers, has gained popularity in South Korea, alongside other premium goods for young children, defying the slowing economy.

In 2013, NXC acquired 100% of Stokke for around 3 billion Norwegian krone, or 500 billion won.

Industry observers expect NXC, the parent of Tokyo-listed game publisher Nexon Co., to ask about 700 billion won ($480 million), or 10 times its 2023 earnings before interest, tax, depreciation and amortization (EBITDA), for Stokke.

Since its acquisition, Stokke’s earnings have been on the steady rise. In 2023, its revenue spiked 31.5% to 2.92 billion krone from the year prior, with the EBITDA up 26.1% on-year to 593.8 million krone.

South Korea’s fertility rate snapped its downward spiral last year, bouncing back for the first time in nearly a decade. It plunged to a record low in 2023.

However, the intensifying competition in the premium baby product market and the low birth rate in South Korea – the world’s lowest – suggest Stokke may now be at its earnings peak, said industry observers.

NXC has also put Korbit, a cryptocurrency exchange operator, up for sale to focus on the gaming business.

Write to Jun-Ho Cha at chacha@hankyung.com
 

Yeonhee Kim edited this article.