IMM PE to Sell Entire 27.7% Stake in Hana Tour... Relinquishing Management Rights

Plan for Bulk Sale of Founder Shares According to Shareholders' Agreement
Management Rights Sale Process Underway... Lead Manager Selection Procedure Initiated

Hana Tour, the No. 1 domestic travel platform, has been put up for sale.

On the 27th, according to the investment banking (IB) industry, the native private equity firm IMM Private Equity (PE) has begun the process of selecting an exclusive sales agent for Hana Tour.

The sale target is a total of 27.7%, combining the 16.68% stake in Hana Tour held by IMM PE through a special purpose vehicle and the shares held by the founder and other related parties. This sale involves the transfer of management rights.

According to the shareholder agreement, in addition to the IMM-held shares, the total 27.7% stake including Chairman Park Sang-hwan (6.53%), the founder of Hana Tour, and Vice Chairman Kwon Hee-seok (4.48%), the co-founder, will be sold as a block.

Hana Tour's shareholders consist of IMM PE and the founders' shares (27.7%), the National Pension Service's stake (5.4%), and other minority shareholders' stakes (65.9%).

Compared to the market capitalization as of the previous day (1.126 trillion KRW), the market value of the 27.7% stake for sale is 312 billion KRW. Additionally, a management premium is expected to be added, resulting in a higher price.

Previously, IMM PE became the largest shareholder by participating in Hana Tour's third-party allotment rights offering at the end of 2019, just before the travel industry was severely impacted by COVID-19. They invested 128.9 billion KRW to purchase 2,323,000 shares at 55,500 KRW per share.

Recently, Hana Tour's stock price rose to 70,000 KRW as its performance improved significantly after COVID-19. With the management premium added, IMM PE is expected to gain substantial profits compared to the purchase price (55,000 KRW per share).

Hana Tour has shown clear performance improvements recently.

Last year, sales and operating profit reached 411.6 billion KRW and 34.3 billion KRW, respectively. Sales increased by 258% compared to the previous year, and operating profit turned positive for the first time in four years. Hana Tour's 2023 EBITDA was 62 billion KRW, and EBITDA for this year is expected to increase by more than 50% compared to the previous year.

IMM PE has also restructured by divesting subsidiaries unrelated to Hana Tour's core travel business and reducing labor costs through workforce restructuring.

The number of employees, which was 2,350 at the end of 2019, was reduced to about 1,200 by the end of 2023. Thanks to this structural improvement, Hana Tour was able to overcome the COVID-19 crisis, and IMM PE has now started the sale process based on this foundation.