Macquarie bids for transportation card operator Loca Mobility

Macquarie Asset Management participated in a bid on Dec. 6 to acquire Loca Mobility Corp., Lotte Card Co.’s subsidiary and the second-largest public transportation card operator in South Korea. 

Kakao Pay Corp., the mobile payment service unit of Korean tech giant Kakao Corp., has requested an additional bidding round so it can join.  

Private equity firm MBK Partners, the largest shareholder of Lotte Card, and JP Morgan, the lead manager of the sale, held the bid on Tuesday to divest of a 100% stake in Loca Mobility.

Kakao Pay, regarded as a potential buyer, requested an additional bid as it hadn’t fully prepared the documentation needed for Tuesday's bid. Car-sharing platform SoCar Inc., which was expected to join the bid, didn’t participate.   

Loca Mobility manufactures pre-paid transportation cards and payment terminals that can be used in various regions in Korea -- Incheon city, as well as Gyeonggi, Gangwon, Gyeongsang and Jeolla provinces.

The firm operates transportation card brand Cashbee, which makes up 37% of the country’s public transportation card market, following TMoney Co., which tops the market with a 60% share.

Cashbee is used for payment at convenience stores, as well as Lotte Group’s fast-food franchise and café affiliates like Lotteria and Angel-in-us. A total of 105,268 stores across Korea accept the use of the pre-paid card as of end-September.

Loca Mobility also builds systems for transportation card transactions and fee settlements. Additionally, it provides real-time information on bus operation and arrival times.

The transportation card operator, which suffered from a decline in passengers amid COVID-19, is regaining profits. As of end-September, it posted 147.3 billion won ($111.5 million) and 14.7 billion won in cumulative revenue and net profit, respectively, on a consolidated basis.

Macquarie is said to value Loca Mobility’s high profitability and stability as the transportation card operator is backed by some local government and banks.

The card operator's subsidiary Mybi Corp. has Kookmin Bank, Busan Bank and Kwangju Broadcasting Corp. as shareholders. Hanpaysys Co., in which Mybi has a controlling stake, has Gwangju city and Kwangju Bank as shareholders.

Write to Dong-Hun Lee at leedh@hankyung.com
Jihyun Kim edited this article.