The race to acquire Yogiyo has attracted retail giants, major private equity funds and even a hotel booking app operator, raising expectations for the food delivery app n °2 in South Korea with an estimated price of 2 trillion won ($1.8 billion).
German Yogiyo operator Delivery Hero and its sales consultant Morgan Stanley have received preliminary offers from Korean retail giants Shinsegae and Lotte, accommodation booking platform Yanolja and several health fund companies. private equity, investment banking industry sources said Tuesday. PEF bidders would include Seoul-based MBK Partners and foreign names TA Associates, CVC Capital Partners, Permira and TPG Capital.
Yogiyo’s selling price is estimated to be between 1 trillion won and 2 trillion won.
Despite the high price tag, Yogiyo is an attractive catch for suitors.
Shinsegae and Lotte, two of Korea’s largest retail companies operating both hypermarket and grocery store chains, are said to be after Yogiyo to leverage the app operator’s nationwide distribution network and create a synergy with offline stores.
Yanolja, the nation’s #1 travel and accommodation booking app, plans to develop the food delivery app as a full-service consumer service provider. Yanolja is reportedly seeking to form a consortium with private equity funds instead of launching an independent bid, an investment banker said.
Private equity firms are also expected to partner with local conglomerates that did not participate in the preliminary tender.
Yogiyo is Korea’s second-largest food delivery app with a 30% market share in September last year, according to market researcher Nielsen Korea. His share is only half of the 59.7% of the best player Baedal Minjok, but more than four times the number 3 Coupang Eats with 6.8%. Shares of Baedal Minjok and Yogiyo reportedly contracted to 53% and 27%, respectively, in February, but they still far outpace their rivals.
However, there is a downside risk for investors. The buyer is also expected to make additional investments for years as e-commerce players are still vying for market share for growth rather than profit.
Yogiyo was put up for sale after Germany’s Delivery Hero received an order from Korea’s antitrust agency in December to get rid of the No. 2 player in order to keep No. 1 Baedal Minjok.
Delivery Hero has until August to sell Yogiyo. He can request an extension of up to six months for unavoidable circumstances.
By Jin Young-tae, Kim Hyo-hye, Kang In-seon and Cho Jeehyun
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]