MBK exercises drag-along right to sell 100% stake, exiting after 8 years

Enterprise value set at 1.8 trillion won; Meritz Securities to provide 500 billion won in acquisition financing

An aerial view of Golfzon County Songdo [Golfzon County]
An aerial view of Golfzon County Songdo [Golfzon County]

The Siena Group, a resort and golf course operator, is set to acquire Golfzon County, South Korea's largest golf course operator, in partnership with CL Asset Management.

According to investment banking industry sources, the Siena Group-CL Asset Management consortium signed a share purchase agreement with MBK Partners, Golfzon County's largest shareholder, on Tuesday to acquire a controlling stake. Morgan Stanley and Samjong KPMG served as advisers on the sale.

The transaction covers 100 percent of Golfzon County's shares. As of the company's most recent annual report, MBK Partners held a 58.37 percent stake through special purpose companies including Korea Golf Infrastructure Investment, while Golfzon Holdings — the holding company of the Golfzon group — held the remaining 41.63 percent.

MBK Partners exercised its drag-along right in the deal, pulling Golfzon Holdings' stake into the sale as well. MBK Partners had secured the right when it invested in Golfzon County in 2018, stipulating that it could exercise the option if the company failed to complete an initial public offering by May 2023. A planned IPO in 2022 fell through amid a market downturn, triggering the condition.

Golfzon County's total enterprise value in the deal is approximately 1.8 trillion won ($1.36 billion). After deducting net debt of around 950 billion won, the equity value is estimated at roughly the mid-800 billion won range.

Meritz Securities will serve as the primary financing arm for the acquisition, providing 500 billion won in acquisition financing to support the consortium.

The composition of the consortium has also drawn attention. CL Asset Management, founded in 2020, recently came under new ownership after real estate developer Mine42 acquired a 90 percent stake. Former Woori Bank President Kwon Gwang-seok was subsequently brought on board and personally purchased a 10 percent stake.

The Siena Group, which grew out of Jeju Island, specializes in operating golf courses and resorts. It expanded its portfolio by acquiring Jeju Country Club in 2022, and last year purchased Seragio Golf Club in Yeoju, Gyeonggi Province — now rebranded as The Siena Veluto — and the Jungbu Country Club, formerly owned by Aekyung Chemical, now operating as The Siena Seoul Country Club. Once the deal closes, the group will instantly become South Korea's largest golf course operator.

If the transaction is finalized, MBK Partners will achieve a major exit roughly eight years after its initial investment. MBK Partners first put in 114 billion won as a financial investor when Golfzon County was launched, then injected an additional approximately 290 billion won to drive operational improvements and growth. As a result, sales nearly tripled from 59.3 billion won in 2018 to 177.5 billion won last year, while operating profit rose 1.8 times from 8.7 billion won to 15.6 billion won.


an@heraldcorp.com