The competition to take over Tongyang Magic Inc. has further intensified as two more firms SK Networks Co. and Unid Co. are expected to submit bids for the buyout that has already attracted about eight possible contenders from home and abroad.

According to finance industry sources on Monday, SK Networks and Unid will soon submit tenders for Tongyang Magic of which preliminary bidding is scheduled to take place on Thursday. Tongyang Magic is a kitchen appliance manufacturer that also handles appliance rental service, and its sale price is expected to reach about 500 billion won ($448 million), according to market experts.

SK Networks reportedly decided to join the buyout race over the kitchen appliance maker to expand its business to home appliance rental market from current car rentals, while chemicals producer Unid is said to be seeking a new growth engine by taking over the kitchen appliance maker.

The sale of the kitchen appliance maker already has drawn a number of bidders. CJ Group that runs a range of retail, food and entertainment business last month joined the acquisition race as well as Taiwan-based Hon Hai Precision Industry Co. announced to take part in the bid. Also, it is reported that domestic private equity firms IMM Private Equity and Stic Investments, as well as offshore players Carlyle Group, Affinity Equity Partners, Bain Capital, and CVC Capital Partners are mulling joining the buyout auction.

NH Private Equity Fund and Glenwood Private Equity that together acquired a 100 percent stake in Tongyang Magic at about 280 billion won in 2014 put the kitchen appliance maker up for sale. Since their acquisition, Tongyang Magic saw its operating profit rise to 38.3 billion won in 2015 from 22.9 billion won from 2013. Sales also increased to 390.3 billion won last year from 321.9 billion won in 2013, and earnings before interest, taxes, depreciation and amortization (EBITA) climbed to 69.2 billion won from 49.4 billion won. Its EBITA for this year is expected to reach about 80 billion won.

The deal arranger NH Investment & Securities Co. aims to open the main bid around mid-September after shortlisting up to five companies from the preliminary bid and conducting due diligence for about five weeks. It targets to complete the stock purchase agreement by the end of September.

By Han Woo-ram

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