Netmarble reaches deal to buy 25% of CowayNetmarble has reached an agreement to buy Woongjin Group’s 25.08 percent stake in Woongjin Coway, a water purifier business.
According to Netmarble on Friday, the company will be purchasing the 18,511,446 shares for 94,000 won ($81) per share.
Netmarble initially proposed a total purchase price of 1.85 trillion won. It was reported that Woongjin Group countered with 2 trillion won for the 25.08 percent stake.
Netmarble and Woongjin Thinkbig will be signing the contract on Dec. 30.
The game company’s acquisition of Woongjin Coway surprised the market.
Netmarble wasn’t one of the candidates in the initial bid for the company in July. The bidders were SK Networks, China’s Haier and the global private equity fund The Carlyle Group.
Netmarble only joined in on the main bid in October, while SK Networks and The Carlyle Group pulled out.
When the company was chosen as the primary bidder in October, Netmarble said it hoped to diversify its business portfolio to expand into smart home appliance by incorporating Woongjin Coway’s home appliance rental business with the game company’s IT technologies, including artificial intelligence, cloud storage and big data.
“Coway is the top player in the home appliance rental industry,” Netmarble Vice President Seo Jang-won said, “It has the potential to become a major player on the global stage in the smart home market when combined with Netmarble’s artificial intelligence, big data and cloud technologies.”
Netmarble also cited Coway’s strong cash flow.
“Netmarble has invested in different emerging industries, such as entertainment, an internet-only bank, artificial intelligence, big data and a blockchain platform. But they are all in the initial stages of development with a limited capability to generate substantial revenues,” the vice president of Netmarble said.
Woongjin Coway, which was founded in 1989, was the first Korean company to start a water purifier rental service.
It currently holds the No.1 spot in consumer appliance rentals, which extends to air purifier and water softeners, with a 54 percent market share. That’s five times larger than the runner up SK Magic, with a 14 percent share.
Recently Netmable has been pushing to diversify its businesses from games.
The company last year bought a 25.71 percent stake in Big Hit Entertainment, which manages boy band BTS, for 201.4 billion won, becoming the second-largest stakeholder of the entertainment company.
Woongjin Coway was put up for sales in June, just three months after Woongjin Group repurchased the company from the private equity fund MBK Partners that it sold to in 2013.
The market from 2012 to 2018 has been growing at an average rate of 15 percent.
Woongjin Group bought back its consumer appliance rental company after paying 1.68 trillion won for 22.17 percent.
BY LEE HO-JEONG [email@example.com]