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2022-07-29

Partnered with Stonebridge to Acquire 46.3% Stake from VIG

Acquisition Valued at Approximately KRW 420 Billion with Financing from KDB, NH, and IBK

Drag-Along Rights Secured for Founder Woong-Chul Kang’s Shares

Growth Driven by Digital Healthcare Expansion and Global Sales Strategy

Han & Brothers Completes Acquisition of Bodyfriend in Partnership with Stonebridge Capital

Emerging private equity firm Han & Brothers has completed the acquisition of Bodyfriend, Korea’s No.1 massage chair company, in partnership with Stonebridge Capital.

According to the investment banking industry on the 29th, the two firms jointly acquired a 46.3% controlling stake in Bodyfriend from VIG Partners through a special purpose fund established as co-general partners (GPs). The transaction is reportedly valued at approximately KRW 420 billion. VIG Partners and Shinhan Venture Investment originally acquired the controlling stake in Bodyfriend for about KRW 400 billion in 2015. Following the sale, Bodyfriend’s founder and current Chairman of the Board, Mr. Woong-Chul Kang, will retain a 40.3% stake, remaining the second-largest shareholder.

The acquisition consortium, including Han & Brothers, has built a strong trust-based relationship with Chairman Kang and plans to pursue an initial public offering (IPO) within a certain period following the investment. If the IPO does not proceed as planned, Chairman Kang will have the option to reacquire the stake, or a drag-along right may be exercised, allowing the consortium to sell his shares along with theirs.

The acquisition financing includes over KRW 150 billion raised through a project fund managed by Han & Brothers and KRW 30 billion from Stonebridge’s blind fund. Additionally, KDB Industrial Bank, NH Nonghyup Bank, and IBK Industrial Bank have agreed to provide approximately KRW 230 billion in acquisition financing. The project fund managed by Han & Brothers reportedly attracted participation from various corporate investors utilizing corporate capital. Although there had been speculation that Harim Group participated as a strategic investor, the group has denied any direct involvement or investment.

Han & Brothers and Stonebridge Capital highly regarded Bodyfriend’s consistent growth and strong financial performance since its inception, as well as its position as the leading massage chair brand in both domestic and global markets. They also noted Bodyfriend’s differentiated technology and premium brand strength, supported by its in-house Medical R&D Center.

Bodyfriend’s revenue increased from KRW 450.4 billion in 2018 to KRW 591.3 billion in 2021. Over the same period, operating profit grew from KRW 50.9 billion to KRW 68.5 billion, and net income rose from KRW 57 billion to KRW 57.8 billion. EBITDA, a key metric used in company valuation, increased from KRW 77.8 billion to KRW 106.3 billion.

A representative of the acquiring parties commented, “We see strong potential for further growth through enhanced digital healthcare capabilities and global market expansion. We will actively implement strategies to enhance corporate value and drive Bodyfriend’s continued growth.”

Han & Brothers, founded by CEO Myung-Ji Heo in August 2021, is a newly established asset management company. The Bodyfriend acquisition marks its first transaction. CEO Heo successfully concluded the deal after extensive discussions with Bodyfriend’s founder, and the firm is staffed with professionals with long-standing experience in finance, including former senior executives from KDB. Han & Brothers plans to actively pursue value-oriented investments across investment banking, asset management, and investment advisory services.