KKR and Anchor Equity Partners, a Korea-focused private equity firm, have acquired a controlling stake in Groupon's Ticket Monster, a South Korean e-commerce business.
The firms, which have teamed up with TMON’s management, will hold equal stakes in the company, according to a statement. The investment is based on a $782 million fully diluted valuation of TMON.
A number of pension funds, sovereign wealth funds and institutional investors, including the Canada Pension Plan Investment Board and Pavilion Capital, will also be participating as investors in this transaction.
Groupon, which acquired TMON in January 2014, will retain a fully diluted 41 percent minority stake in the company. KKR and Anchor will inject new capital into the company to help fund its future growth opportunities.
TMON is a pioneering mobile-first e-commerce platform that provides online and mobile shopping experience to customers across South Korea. TMON has already become one of Korea’s largest online retail marketplaces and offers a selection of discounted items across three main categories: goods, which includes clothing, household and fast-moving consumer goods; local services, including restaurant, entertainment and leisure coupons; and travel, including discounted transportation tickets, hotel stays and vacation packages.
TMON’s business leverages key consumption and technology trends in South Korea, a market which is experiencing a rapid shift from offline-to-online and PC-to-mobile retail. South Korea’s e-commerce market has experienced a CAGR of 16 percent since 2008, stemming from consumers’ increasing focus on convenience, selection and value items, according to South Korea’s National Statistics Office.
“We believe that South Korea represents a sizable and attractive market opportunity given the clear shift by consumers towards mobile commerce, convenience and value goods,” said Stephen Ko, managing director of KKR Asia, and Sae Wook Wi, a partner at Anchor.
KKR, which is making the investment from its $6 billion Asian Fund II, has invested more than $13 billion of equity in more than 50 companies across software, internet, media and IT-infrastructure since 2000. Recent investments include GoDaddy, Internet Brands, Trainline and Uxin. KKR also aims to leverage its experience investing in retail companies, including Oriental Brewery, Dollar General, Walgreens Boots Alliance and Haier, to help TMON grow and achieve its goals, the firm said.