MBK buys textile supplier to Nike, Adidas for $654 mn

The deal was through MBK's fifth buyout fund, which closed at $6.5 billion in 2020 and invested in Japan's Tsukui in 2021

Michael ByungJu Kim, founder of MBK Partners

Junho Cha 1

2022-01-03 19:17:40 chacha@hankyung.com

M&As

South Korea’s MBK Partners said on Jan. 3 that it has completed the 100% acquisition of Dongjin Textile Co. -- a Korean firm that has been supplying footwear textiles to Nike and Adidas for more than 30 years -- and its affiliate Kyungjin Textile Co. The deal closed at 780 billion won ($653.8 million), with a corporate value of 720 billion won.

The Korean private equity firm and Dongjin signed a stock purchase agreement (SPA) and negotiated the deal in November of last year, industry sources said at the time. Dongjin Textile’s Vice President Lee Kwang-soo will continue to lead the textile business as CEO, MBK Partners said.

MBK Partners said it expects the global sports shoe market to continue to grow 10% on average every year. The PE firm said it also sees global footwear products increasingly using various other textiles rather than only synthetic leather.

From June 2020 to June 2021, Dongjin Textile’s annual sales reached 213 billion won, and earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to 78 billion won.

The acquisition was the first domestic investment through the PE firm’s fifth buyout fund, which held its final close at $6.5 billion in May 2020. The fund marked the third-biggest fundraising for an Asia-focused private equity fund at the time of the closing, after Hillhouse Capital’s $10.6 billion raised in 2018 and KKR’s $9.3 billion fund launch in 2017.

The first target of the buyout fund was Japan's Tsukui Holdings Corp, a residential nursing and home care service provider. According to the Tokyo Stock Exchange, MBK Partners became the largest shareholder of Tsukui, by purchasing a 64.1% stake in the home care service provider in March 2021.

MBK Partners is a North Asia-focused PE firm, managing $24 billion of capital. In November of 2021, it made the $3.5 billion sale of Japan's largest golf course operator Accordia Next Golf to SoftBank's Fortress Investment Group, marking the largest PE exit transaction of the year in Korea, Japan and China.

Write to Junho Cha at chacha@hankyung.com
Jihyun Kim edited this article.