Category: Mergers & Acquisitions

Korean ST Unitas to acquire the Princeton Review

ST Unitas, Korea’s largest operator of private learning institutes on February 14 announced that it has acquired the Princeton Review, a major U.S. education service firm, as its first step toward becoming a global powerhouse in the expanding online-based exam preparation market.

“We are happy to announce that ST Unitas and the Princeton Review have become one family,” said Yoon Sung-Hyuk, ST Unitas’s CEO. “We will together build a global education platform that offers innovative, information-technology based, tailored services to our users across the globe.”

Financial terms of the agreement were not disclosed though predicaments according to investment bank analysts states that ST Unitas would have to pay about 100 billion won (US$87 million) to acquire the Massachusets-based platform.

Founded in April 2010, ST Unitas is the first in the industry to develop scientific studying methods based on big data from 60 subsidiary brands which are ranked number one in their respective division including Engdangi (English cram school) and Gongdangi (Civil Service Exam cram school), which utilize IT in education.

The education firm offers English, Chinese, and other foreign language courses as well as various civil-service tests in addition to a range of lectures which are available both online and offline. Consequently, ST Unitas reached over 1200 employees and annual sales of $350 million (400 billion won) in 2016.

The Princeton Review, founded in 1981, is a college admission services company offering test preparation services, tutoring, and admissions resources, online courses, and books. Besides the United States, it has sent more than 1.5 million students to elite colleges in 20 countries.

“We believe that now is the right time for us to enter the United States, the world’s largest education market. The U.S. online education industry has been expanding rapidly over the past five years,” Yoon said. “Given that the majority of IT platforms that dominate the global market, such as Facebook and Uber, were born in the United States, we decided to create our platform in the world’s largest economy. This is another reason why we decided to acquire The Princeton Review.”

Following this acquisition, the CEO said ST Unitas will take advantage of the U.S. education service firm’s vast database, its extensive overseas network as well as its knowhows on the scholastic aptitude test (SAT) and other standardised U.S. exams to become a leader in the $250 billion online education market.

“We have been successful in Korea because we work hard to offer top-quality education materials to our customers at affordable prices,” Yoon said. “What we would like to do is take this business model in cooperation with The Princeton Review to the United States and other countries. I have no doubt ST Unitas will become a top global education platform provider.”

The Princeton Review CEO Kate Walker said that in cooperation with ST Unitas, the company will continue to expand its market share and secure technology leadership in the rapidly growing online education market.

By Vivian Foo, Unicorn Media

China’s JoyMe, Kee Ever to set up US$360 million M&A fund to acquire oversea video game companies

JoyMe Group, a Beijing-based internet technology company has formed a strategic alliance with Kee Ever Bright Decorative Technology Co., Ltd., a Jiangsu province-based online video game company to launch a RMB3 billion (about US$360 million) video game M&A fund.

The first phase of the fund, tentatively set at RMB1 billion (about US$140 million) will focus on the investment of video games distribution, production, development, eSports, and other industries which lie in line with the development strategy of the two investment partners.

In 2016, the video game market in China was estimated to worth RMB165 billion (about US$24 billion), in addition to an emerging trend in merger and acquisition, recording a total of US$28 billion transaction value in the same year. This can be seen looking at Tencent Holdings Ltd’s US$8.6 billion acquisition of Finland-based mobile game development company Supercell and Youzu Interactive’s €80 million acquisition of German game business Bigpoint, among some.

“The global video games industry has a history of over 50 years, and China’s gaming market has its own three eras whereby, in the beginning, companies like Sdo and The9 only aim to become the proxy of a good product. Later, a new batch of companies emerged which set research and development at its core. Today, the situation has transitioned to that of Tencent and Netease, whereby internationalisation becomes the driving force of most gaming companies,” said Chen Yang, the CEO and Group Chairman of JoyMe.

“Hence, it is time for us to launch a buyout fund targeting the international market. As comparing China to other countries, we are lacking in terms of technology and creativity although China’s game industry market has an edge in its user base, paying capacity as well as commercial capacity of Chinese companies which can leverage global attention. In this case, we intend to acquire the best foreign products and talents back to China,” said Chen Yang.

Founded in 2011 by Chen Yang, a former lead producer at U.S.-based Electronic Arts Inc. The company previously raised a RMB130 million (about US$18 million) series B round from Fosun Kinzon Capital and Bluerun Ventures. It later raised an undisclosed amount of series C round from online video platform Youku Tudou and Beijing-based game developer Ourpalm.

Prior to the establishment of investment funds, the Group has formed a North American branch and which was joined by former Lucas Entertainment CEO Jack Sorensen and other senior players. In this retrospect, Chen Yang said that compared to other teams, their team’s advantage lies in understanding the North American market, “our team in the international large-scale game companies who have a lot of executives, including myself is the case.”

Speaking on the future of the group for the game industry layout, Chen Yang said, “We will not acquire studios at their early stages, as though their game content development may be creative, at the same time, there are still many uncertainties. Moreover, this fund sets out to be an M&A fund instead of being a VC, hence game companies model which has not been proven in the market will not be included in our investment scope.”

By Vivian Foo, Next Unicorn

Japanese peer-to-peer marketplace app Mercari to acquire Asia-focused auction site Smaoku

Mercari Inc., the first Japanese startup to be valued at more than US$1 billion, announced on February 17 that it has acquired Zawatt, the startup running Japan-based online auction site catering brand goods Smaoku.

Financial details of the transaction were not revealed but the deal will take effect as of February 27. Upon the acquisition, Zawatt co-founder and CEO Daisaku Harada will join Mercari while Smaoku will continue its operations run by the current staff.

Short for smart auction, Smaoku allows users to interact with other users to buy and sell authentic second-hand items. Last May, English and traditional Chinese interfaces were made available in addition to the original Japanese platform, aiming to serve U.S., Hong Kong, Taiwanese and Singaporean buyers.

In addition to Smaoku, Zawatt since its inception in 2011 has also released several web services including WebScope, a social list bulletin board and Ohako, a karaoke companion finder. The company launched Smaoku in October 2013 and won KDDI Mugen Labo’s 5th batch demo day for its real-time auction concept which makes users feel as if they are at a real auction site when buying items online.

In 2015, Zawatt raised 250 million yen (US$ 2 million) from IMJ Investment Partners along with China’s SIG Asia Investments and its partner VC firm MS Capital of Japan which are among some of the investors who will exit with this merger.

Mercari, on the other hand, is a Japanese peer-to-peer marketplace app that is gaining popularity in the U.S. as an alternative to Amazon or eBay. It has claimed the title of Japan’s first pre-IPO startup unicorn after raising 8.4 billion yen (about US$75 million) in its first Series D which brings its valuation of over US$1 billion.

Speaking on the acquisition, Daisaku Harada said, “Mercari’s vision of creating a worldwide marketplace that creates new values for pre-loved items is exactly consistent with the aim of Smaoku. With this M&A, we will work towards further development and expansion of the C2C business in the luxury good genre which has a high demand worldwide.”

By Vivian Foo, Unicorn Media

Indian packaged foods startup Sattviko acquires outfits curation platform StylSpot

Rays Culinary Delights Pvt. Ltd, the parent company of packaged foods startup Sattviko, has recently acquired fashion stylist curation portal StylSpot in order to strengthen its technology platform.

This makes StylSpot the third acquisition by Sattviko following the deals where it has acquired packaged food maker FYNE Superfood in August 2016 and food delivery startup Call A Meal in November 2015.

Financial details and terms of the deal were not disclosed but one of the four co-founders of StylSpot, Sumeet Chilwal will join Sattviko’s core team following the acquisition.

Founded in 2015 by four IIT (ISM), Dhanbad graduates — Sumeet Chilwal, Gaurav Goyal, Amit Verma and Jalaj Dagar, StylSpot is a platform that brings users completed branded outfit looks for the occasion handpicked by fashion stylists.

While Sattviko, on the other hand, was launched in 2014 as a healthy lifestyle brand. At present, it operates a chain of quick-service restaurants (QSR) in three cities, including Gurgaon and Jaipur, ventured into the online delivery of packaged foods in February 2015.

The e-commerce arm sells a range of products, including traditional snacks such as makhanas, flax seeds, raisins, jaggery, and chana. “Since Sattviko is now into e-commerce, StylSpot’s product discovery platform will help us scale up,” said Prasoon Gupta, the Co-founder of Sattviko.

Last November, Sattviko had raised an undisclosed amount of angel investment from a number of individual investors including Raman Roy, the Founder of Quattro Global Services, Ashish Gupta, former CEO of Evalueserve and Vinnie Mehta, executive director at ACMA.

Other investors who also participated include Yogesh Andlay, founder of Nucleus Software Ltd; Kevin Freitas, the HR leader at Inmobi; N Ravikiran, the former head of product at Wipro; G Ravishankar, an ex-CEO of Jet Airways and former CFO at GE Healthcare; Gaurav Khurana, a Microsoft employee; and Vaibhav Jain, Swastika Company’s founder.

By Vivian Foo, Unicorn Media

Wah Seong Corp acquires German pipeline coating firm mutares AG for US$20.6 million

Malaysia’s energy sector’s infrastructure service provider Wah Seong Corp Bhd has acquired a Germany-based pipe coating firm, mutares Holding 16-AG for €19.5 million (about US$20.6 million).

In a filing with Bursa Malaysia yesterday, Wah Seong said its indirect wholly-owned subsidiary Wasco Coatings Germany GmbH (WC Germany) entered into a share purchase agreement with mutares AG for a 100 percent stake acquisition.

“The acquisition would enable WC Germany to use the existing plant and machinery in Mukran, Germany, to perform its pipe-coating activities for the purposes of the Nord Stream 2 project,” a spokesperson from Wah Seong said.

Nord Stream 2 is a planned pipeline through the Baltic Sea, which will transport natural gas over 1,200km from the world’s largest gas reserves in Russia. It involves two parallel 48-inch lines, each starting from southwest of St Petersburg and ending at Greifswald on the German Coast.

On September 6, 2016, Wah Seong’s indirect wholly-owned subsidiary Wasco Coatings Europe BV entered into a contracts with Nord Stream 2 AG (NS2 AG) for the provision of concrete weight coating and storing of pipes for the Nord Stream 2 project at a contract value of €600 million (about US$636 million)

The €19.5 million purchase price takes into consideration the requirements of the Nord Stream 2 project and will be funded through project financing by NS2 AG. The acquisition is expected to have positive effect on the earnings of Wah Seong for the financial year ending Dec 31, 2017.

Pro-acquisition, this will give WSC unit the access to use mutares’ plant and machinery to provide services for Nord Stream 2 Project and there will not be any effect on the share capital and substantial shareholdings fo Wah Seong as the total purchase consideration is done entirely by cash.

“WC Germany is involved in the pipe-coating services for the oil and gas industry and trading of all associated goods and services while MH-16 is a stock corporation incorporated under the Ferman law and based in Weissenfels, Germany,” a spokesperson from WC Germany said.

By Vivian Foo, Unicorn Media

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