Eugene Group, Stonebridge Capital mull logistics firm Mesh acquisition

South Korean conglomerate Eugene Group, one of the largest construction materials suppliers in the country, is planning to acquire local logistics company Mesh Korea Co., the operator of Vroong delivery service.

The group has formed a consortium with Korean private equity firm Stonebridge Capital to buy Mesh, with an estimated value of 100 billion to 200 billion won ($74.7 million to $149.3 million), investment banking sources said on Nov. 17.

Korean credit finance company OK Capital Co. has hired KPMG Samjong Accounting Corp. as the sale's lead manager and has pushed the sell-off of Mesh since last month.

OK Capital in February offered Mesh 36 billion won of securities-based lending, which is collateralized with a 21% stake in the logistics firm. The stake was combined with two shareholders' stocks, Mesh CEO Yoo Jung-beom's 14.82% and Chief Technology Officer Kim Hyung-sul's 6.18%.

Mesh was planning to attract investment to repay the loan, but decided to sell off its management rights amid the bear market and global interest rate hikes.

Eugene Group owns Eugene Logistics, which has last-mile delivery services provider Sonic as a subsidiary. The group expects the acquisition of Mesh will create synergy with Sonic’s delivery business.

Sonic is targeting a niche market, transporting refrigerators and furniture in the early morning hours for retail giants such as Homeplus, SSG.COM, GS Retail and grocery delivery platform Oasis. The last-mile delivery firm attracted 100 billion won in convertible bonds from Stonebridge Capital in September.

Meanwhile, investors are raising questions about whether Eugene Group and Mesh will agree on the deal value and complete the transaction.

Mesh was valued at around 550 billion won when KB Investment injected 27 billion won in June 2021. The firm’s value has plunged to a range of 100 billion to 200 billion won amid the illiquidity crisis this year.

Write to Chae-Yeon Kim at why29@hankyung.com
Jihyun Kim edited this article.