Affinity Equity Partners, BlueRun Ventures invest $887m in Korean retailer Shinsegae

Affinity Equity Partners and BlueRun Ventures have sealed a deal to invest 1 trillion won ($887 million) in South Korean retailer Shinsegae Group to grow its online presence.

The agreement came nine months after the two investors and Shinsegae signed a memorandum of understanding in January this year.

Under the terms of the agreement, Shinsegae will establish a new entity by the first quarter of 2019 by spinning off the online units of Shinsegae Department Store and E-Mart. Once the new online company is set up, Shinsegae will receive the first 700 billion won tranche of the investment, while the remaining 300 billion won will be disbursed later.

An extraordinary shareholders’ meeting will be held next month to go through the plan.

“With the launch of the new business, it will lead future growth of the group. We will focus our core competencies on developing the new online company into a key distribution channel,” said Shinsegae Group vice chairman Jung Yong-jin.

Shinsegae Group, originally a part of business giant Samsung, plans to invest 1.7 trillion won in its e-commerce platform, improving the logistics and distribution infrastructure as well as product competitiveness and technology. A logistics centre under construction is anticipated to start full-scale operation in the second quarter of 2019.

The firm expects to grow its sales revenue to 10 trillion won by 2023. It said M&A activity will also be considered for further expansion.

The two investors in Shinsegae both have a track record in investing in South Korea. Hong Kong-based Affinity Equity Partners acted as the sole investor in companies such as MK Electron, The Faceshop, Korea Digital Satellite Broadcasting, Burger King Korea and Loen Entertainment, and lead investor in the likes of Kyobo Life Insurance, Oriental Brewery, Himart and Haitai Confectionery and Food.

Meanwhile, US-based BlueRun Ventures, which has an office in Seoul, focuses on the technology space. Kwan Yoon, a partner at the firm, oversees investments primarily in Korea.

The post Affinity Equity Partners, BlueRun Ventures invest $887m in Korean retailer Shinsegae appeared first on DealStreetAsia.

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