MP Group "JaAn Group Acquisition Due Diligence Begins... Sale Progressing Smoothly"

[Asia Economy Reporter Yoo Hyun-seok] MP Group stated on the 18th, "The suspension of stock trading for investor protection does not affect the sale of our subsidiary MP Hangang," adding, "On the 8th, a performance bond of 5 billion KRW related to the stock trading and transfer of management rights of MP Hangang was deposited, and currently, the Jaan consortium is conducting due diligence on MP Hangang."

On the 8th, MP Group announced that it signed a legally binding Memorandum of Understanding (MOU) with the Jaan consortium for the sale of MP Hangang’s shares and management rights. The total transfer amount is 25 billion KRW, with 21.83% of shares being sold to Jaan, a KOSDAQ-listed company, and Jaan Group, an unlisted company, paying a 5 billion KRW performance bond, which is 20% of the total amount. After a two-week due diligence period, the remaining 20 billion KRW will be paid. Additionally, upon signing the final contract, Jaan Holdings will participate as a financial investor and acquire an additional 4.37% stake in MP Hangang for 5 billion KRW.

An MP Group official said, "Since the Jaan consortium’s due diligence on MP Hangang is proceeding without issues, the sale is expected to be completed smoothly."

The core entity of the Jaan consortium (SI) acquiring MP Hangang is Jaan Group. It is expected that if MP Hangang is acquired by Jaan Group, business synergies will arise between the two companies through cosmetics and beauty online platforms.

Founded in 2011, Jaan Group’s main businesses are fashion and cosmetic distribution and software development. As of 2019, it recorded sales of 50 billion KRW and operating profit of about 15 billion KRW. The company’s profitability has steadily increased over the past three years, with sales of 42 billion KRW and an operating profit margin of 20% in 2017, 22% in 2018, and over 30% in 2019.

Jaan Group has aggressively expanded overseas, receiving the 10 million USD Export Tower award in 2017. It established branches in LA and Singapore in 2018, and in Hong Kong and Vietnam in 2019. Last year, it expanded profits through the stabilization of its online platform. The online distribution platform Celecon, launched in 2015, has gained momentum, improving profitability, and has been boosted by the increase in contactless consumption due to COVID-19.

This year, through Celecon’s entry into the Japanese market, Jaan Group is promoting global market expansion by supporting five Asian languages, currencies, and convenient payment methods.