Netmarble-gobbles-up-Woongjin-Coway
Courtesy of Woongjin Group

Game publisher buys rental giant

Netmarble, one of the leading game publishers in Korea, managed to snap up Woongjin Coway, the country’s business bellwether in the water purifier rental industry.

Netmarble said Dec. 27 that the Seoul-based company will spend 1.74 trillion won to purchase 18.5 million shares, or 25.08 percent, of Woongjin Coway from Woongjin Group.

Netmarble plans to sign the contract with Woongjin on Dec. 30, while paying 10 percent of the money as a deposit.

Originally, such companies as SK Networks and China’s Haier, as well as global private equity fund of the Carlyle Group threw their hats into the ring.

But they eventually pulled out of the bidding, and the lack of competition led to a lower price than Woongjin wished _ it initially hoped to get at least 2 trillion won for the stake.

Netmarble has proactively tried to diversify its business portfolio through M&A. Last year, it bought a 25.71-percent stake in Big Hit Entertain, the agency of K-pop superstar BTS, for 201.4 billion won.

And observers have pointed out that Coway would be an attractive M&A target of Netmarble because of its stable cash flow.

Since its foundation in 1989, Woongjin Coway has grown to become Korea’s No. 1 player in the consumer appliance rentals business. On top of water purifiers, the firm rents air purifier and water softeners.

Its overall market share is higher than 50 percent compared to No. 2 player SK Magic, whose market share is less than 15 percent.

Cash-strapped Woongjin Group sold the lucrative company to homegrown buyout fund MBK Partners in 2013. Earlier this year, the group bought the firm at 1.68 trillion, but in a few months, decided to resell it to improve its financial status.