South Korea-based Simone Ltd., a globally leading original design manufacturer (ODM) of world’s renowned luxury handbags, joined hands with local private equity firm MBK Partners to acquire U.S.-based GST AutoLeather Inc., the world’s largest leather car seat maker.

According to the investment banking industry on Monday, in cooperation with MBK Partners, Simone Investment Managers, an investment subsidiary of the handbag ODM, signed a memorandum of understanding (MOU) with Japanese private equity firm Advantage Partners that holds a 100 percent stake in GST AutoLeather to acquire the full stake at about $400 million. The Korean investors is said to be in the final stages of due diligence for the buyout.

Established in 1933, the U.S. leather car seat maker ranks first in the global leather car seat market. The company supplies its products to global automakers including Toyota Motor Corp., Honda Motor Co., General Motors, Chrysler and Volkswagen AG. The company established a joint venture in India with Tata Motors in 2014, and it has foreign branches in Mexico, Germany, Hungary, South Africa, China, Japan and Korea.

Simone is the world’s top ODM of high-end handbags including DKNY and Michael Kors, and the company has recently launched its original handbag brand 0914. Chairman Kenny Park is said to have decided to buy the leather car seat company in hopes to strengthen the company’s foothold as an original leather master and enhance the company’s brand.

Simone Investment Managers is the Korean handbag ODM’s investment arm that mainly manages personal assets of the chairman Park. Previously, the asset manager had made investments in real estate such as the Washington Harbour Building and the headquarters of Weatherford.

With the acquisition, Simone Investment is expected to spearhead mergers and acquisitions to expand the business of Simone. Simone that has been posting a net profit of about 130 billion won ($109 million) every year is expected to funnel enough M&A funds for its investment arm.

In the latest takeover deal, MBK Partners will likely provide financing Simone Investment Managers. The Japanese branch of MBK Partners will take charge as the seller is based in Japan.

By Kang Doo-soon, Han Woo-ram

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]