Korea Asset Management Corporation (KAMCO) began the valuation process for Kyobo Life Insurance on Feb 1^st. The national asset manager will choose the preferred bidder in May for the sale of its 9.9% stake in the insurer.

According to finance industry sources, KAMCO plans to officially announce the sale in March, after the valuation has been completed. Notice will be sent to domestic and foreign institutional investors, letters of Intent will be received until April, and the preferred bidder will be determined in May.

Over the coming weeks, KAMCO will be inspecting the insurer’s financial situation, calculating the enterprise value and the disposal price. Given that Kyobo Life is traded over-the-counter, KAMCO will be very cautious in calculating the price.

An M&A industry source said, “KAMCO doesn’t have a controlling stake in the company so it is unlikely to receive a premium. Last year at book value, the shares were valued at 250 thousand won, so they are predicted to sell for around 300 thousand won.”

Domestic and foreign investors have shown their interest in the sale despite the lack of control.

An individual in the M&A industry said, “Domestic and foreign PE firms, and financial holding companies are interested in the stable dividend income, and the margin from an IPO. If the price is appropriate, the sale will most likely be accomplished smoothly.”

He also said, “Domestic financial holding companies also show great interest in taking over Kyobo Life to use as a distribution channel for insurance. Furthermore, the takeover the stakes of Kyobo Life could become a starting point for a purchase of Daewoo’s stake in the company.”

Last December, Daewoo International selected Woori Investment & Securities Co., Ltd. and Macquarie Securities as consultants. However the negotiation to dispose its 24 percent stake in Kyobo Life has yet to get under way. Daewoo International is still exploring various methods for achieving liquidity.

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The press release says the JV will rely on Corning’s Lotus Glass technology and Samsung’s competencies in  OLED displays, to “supply OLED backplane glass substrates for Samsung Mobile Display, as well as for the broader Korean market.”

The press release cites an NPD DisplaySearch report which says that OLED display revenues will reach more than $20 billion by 2018.

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The companies will be bidding to purchase a combined 57.6 percent stake in Hi-Mart. The stake, worth about 1 trillion won, is being sold by it’s top three share holders, Eugene Corp (31.3%), Himart CEO Sun Jong-koo (17.4%), and HI Consortium (8.9%). The sellers have appointed Citigroup Inc to advise on the sale.

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Based out of Seoul,  the new company, LG-Hitachi Water Solutions Co., Ltd., will be based in Seoul and will focus on R&D, manufacturing, and sales of equipment and facilities used for water and sewage treatment.

The company will start off backed by 18 billion won in capital with LG holding a 51 percent stake and Hitachi Plant Technologies holding the other 49 percent.

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The two companies announced they had signed an MOU in December of last year in order to look into areas for mutual strategic and business cooperation and to complete a diagnostic review.

“Following the successful completion of the diagnostic review, the companies would then seek to present the findings to their respective boards of directors and engage with key stakeholders before finalising the transaction agreements and presenting the transaction to Telkom shareholders for approval,” the company stated.

Under the proposed deal, KT Corporation will acquire a 20% stake in Telkom, allowing them to diversify and gain a footprint in Africa. The deal is estimated to be worth around $617 billion.

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According to the article, the coffee chain is reviewing proposals  from several global private equity funds for investments in the 30 to 40 billion won range. Investment from an international PE fund would give the coffee retailer’s reputation a boost among investors. However, the real significance behind this investment would be the precedent  it would likely set for the company’s IPO valuation.

Last April, Hyundai Securities, NHN Investment, and Shinhan Capital participated in the company’s issuance of redeemable convertible preferred stock by investing a total of roughly 4 billion won. Hyundai Securities purchased 130,330 shares for about 1.78 billion won or 13,362 won per share. According to independent ratings service, Nice Pricing Services Inc., as of September of last year, the stake was worth about 2.02 billion won.

As of May 2011, Café Bene has issued a total of 6,699,900 shares, which would be worth about 89.5 billion won at the April sale price and 101.6 billion at the official price given by Nice Pricing Services Inc.  If Café Bene is successful in getting investment from a global PE fund, it will provide an indicator of how much the coffee chain’s valuation has changed since last year. This means all eyes will be on the cafe chain in the coming months, trying to get a barometer of how the market views their performance.

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Hana is also planning to purchase an additional 6.25 percent stake from the Korea Export-Import Bank, giving the bank a total 57.27 percent stake in KEB. After the deal is completed, Hana will control Korea’s largest overseas banking network as well as the second-largest local operation.

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Qbit welcomes approaches from financial or legal advisors, while it will use its own contacts for accounting issues, Kim added.

Although either a financial or a strategic investor is acceptable, Qbit would prefer a strategic investor that could generate synergy with its RFID solutions, Kim said. Companies in the shipping business, food manufacturers with assembly lines and listed RFID system providers would be ideal, he added.

After the deal, Kim expects to hold a 51% stake in Qbit, while the employees will own 30%, said Kim.

Qbit is the “master distributor” of Mojix STAR System, an RFID tracking system, which is developed by Silicon Valley-based and venture capital-backed Mojix. When asked whether the business partnership with Mojix could develop into a JV or a strategic one, Kim said it was too early to comment on such opportunities.

Senior Vice President of Mojix, Shawn Manesh, also said the company just entered South Korea and recently formed a business partnership, so it was too early to comment on this matter.

When Qbit was established last October, the company received government subsidies and private funding from Korea Development Bank. Kim said most of the funds have been used.

The company is aiming to post 20 billion won in sales this year, Kim said. Global clients using the Mojix STAR System include Kraft Foods, BP, BMW, and Lufthansa.

by mergermarket reporter Eun Young Chough

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The company is looking for global financial investors to make a $2-4 million investment, according to Chief Executive Officer Insik Kim. The proceeds will go toward increasing the company’s international prestige and globalizing its shareholder structure. Currently, domestic investors hold a 38% stake, while Kim, who is the largest shareholder, owns 28% and individual investors hold the rest.

Biolsystems, a privately held South Korean bio-ethanol production facility designer and producer, anticipates receiving interest from global investors on its technology that is near the commercial stage, Kim said. It will issue redeemable convertible preferred shares with a 10-year maturity for a $2-4 million investment.

It is currently building a marine bio-ethanol production facility to run a test bed to produce 4,000 liters of bio-ethanol per day by the end of this year. It plans to commercialize the technology by 2013 or 2014, he explained.

All the R&D and building production facility costs have been secured. New investments from foreign investors will be used for operation purposes, Kim said. POSCO Family Strategy Fund, Jeonnam Green Energy Fund, Daewoo Shipbuilding and Marine, Hansung Enterprise and Leading Investment are already shareholders in the company having injected 4.45 billion won in December 2009 and November 2011. They collectively own a 38% stake. Biolsystems also received another 10.8 billion won in government funding, he added.

The domestic institutional investors paid  3,000 won per share, representing a par value of 500 won), according to Kim. However, Biolsystems is expecting to receive a higher valuation from foreign investors in this current round of funding, as the most important costs have already been covered, and the company now only needs to evaluate potential profit once it commercializes the technology, he said.

Biolsystems was established in 2009, when it received a technology transfer from a government entity, Korea Institute of Industrial Technology (KITECH), to take it to the commercial stage on a corporate level, Kim said. The technology is to produce bio-ethanol at a lower cost by using sea algae. Traditionally, bio-ethanol is made from corn and sugar cane; however, using sea algae is less expensive, according to Kim. It costs around $0.60-$0.8 cents to produce a liter of bio-ethanol from corn and sugar cane, but sea algae costs $0.36, he said.

The marine bio-ethanol technology was originally developed by KITECH and was registered globally in 2008.

Biolsystems plans to increase its production and license out its design of the marine bio-ethanol production facility to construction companies and bio-ethanol producers, Kim said.

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The company is in talks with a potential strategic investor, he noted, adding that it would be highly receptive to approaches from global venture capital funds.

The company already has both legal and financial advisors in place, including Kim & Chang and undisclosed securities firms, to launch an initial public offering on the KOSDAQ possibly by 2014. The IPO is to provide an exit for its existing and potential investors, the CEO added.

Hwang holds a 35 percent stake in Obigo, which has annual sales of over USD 20m, while Samsung Venture Investment and LB Investment each hold 26 percent. The rest of the shares are held by angel investors, the CEO noted.

Obigo develops standard HTML5 browsers, which provide a one-stop platform for smart phones, smart TVs, automobiles and semiconductors. Its platforms allow application developers to create their apps or content only once, instead of numerous times separately, for Apple iPhones, Google Android-based smart phones, Samsung and LG’s smart TVs.

Hwang said the company is also looking to adapt such platforms into automobiles and digital multimedia broadcasting (DMB). It is working with NTT DoCoMo for DMB on smart phones, while collaborating with Hyundai Motor, Kia Motors, BMW and Mitsubishi on developing smart automobiles.

Its browser platforms, linking with cloud computing for automobiles will have apps that can conduct real-time diagnosis of engine oil and tires, and drivers can check them via smart phones, he added. They can also open doors and turn on high beam or fog lights before hitting the road in the rain.

Hwang said his long-term goals include beefing up the company through acquisitions or by equity investments in venture start-ups by establishing a VC fund subsidiary like NHN Investment, which is part of NHN, the operator of Korea’s largest search engine, Naver.

Obigo’s other customers include Intel, Qualcomm and HTC, and Norway-based Opera Software is considered its peer, according to Hwang.

by mergermarket reporters Eun Young Chough and H. Park

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