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E-commerce platform TMON delays IPO plans

The startup undergoes leadership changes and acquires a media platform Pikicast to better prepare for IPO success

By Jul 23, 2021 (Gmt+09:00)

E-commerce platform TMON delays IPO plans

South Korea’s e-commerce platform TMON Inc., majority-owned by KKR & Co. and Anchor Equity Partners, will postpone its plans for initial public offering.

According to the investment banking industry on July 22, TMON and its IPO underwriter Mirae Asset Securities Co. have tentatively agreed to halt its IPO plans this year. The e-commerce platform in February had raised 305 billion won ($265 million) by completing its pre-IPO share sale.

Sources say that TMON had considered public listing on either in Korea or in the US, following suit of its market peer Coupang Inc. But unlike Coupang whose revenue surpassed 13 trillion won ($11.3 billion) last year, TMON’s revenue during the same period was 151 billion won ($131 million), down 14% from 2019.

TMON’s co-CEO Jeon In-chun, who led the company’s IPO project, also resigned on June 15, in just about one month after his appointment.

“TMON’s top management understands the challenge in pushing through its IPO plans within this year, given that its recent business performance was not so spectacular,” said an investment banking analyst.    

Following the delay of IPO plans, TMON will focus on strengthening future growth segments including live commerce and media content creation. TMON last month acquired Atreez, the operator of Korea’s video content platform Pikicast. After the acquisition, Atreez’s founder Jang Yoon-seok has been leading the company’s diversification into other areas as the co-CEO of TMON.

Some financial analysts highlight that the retail giant Lotte Group’s offer of 1 trillion won ($869 million) to acquire TMON in 2019 might have been the last opportunity for TMON’s majority shareholders to make big returns on investment.

TMON’s current owners KKR and Anchor Equity acquired ownership of TMON in 2015 by purchasing 59% of the company’s shares from Groupon Inc. at 380 billion won ($331 million). TMON’s enterprise value at the time of the acquisition was estimated at 860 billion won ($747 million).

KKR and Anchor Equity increased their share ownership to 98.4% by the time of Lotte’s 1 trillion won offer in 2019. Sources said that while one of the co-owners, KKR, was open for negotiation at a price around 1.1-1.2 trillion won ($0.9-$1.0 billion), the other co-owner Anchor Equity virtually turned down Lotte’s offer by insisting 1.4 trillion won ($1.2 billion) as its asking price.

The sources also added that as TMON is co-owned by more than one company, an ongoing issue is that its leadership positions undergo changes too frequently to satisfy the business needs of both KKR and Anchor Equity.   

“Anchor Equity, a much smaller-sized investment firm than KKR, must have had different financial priorities at the time of Lotte’s 1 trillion won offer,” said an industry source.

Write to Jun-ho Cha and A-young Yoon at chacha@hankyung.com

Daniel Cho edited this article.

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