Korean buyout firm VIG Partners on Friday announced that it has sold a 10% stake in Preed Life, a domestic pre-need funeral service provider, to Mastern Partners, the private equity arm of real estate asset manager Master Investment Management.
Mastern acquired the minority stake for 50 billion won ($43 million), just 15 months after VIG fully acquired Preed Life via its portfolio company Joun Life, according to the announcement.
VIG first invested in Juon Life through its Fund III in 2016 and accelerated the consolidation via subsequently acquiring shareholders Kumkang Mutual Aid and Modern Sangjo in 2017 and 2019, respectively. The firm fully acquired Preed in June 2020 through VIG Fund IV, which closed in late 2019 at $850 million.
Preed is the first funeral service provider in South Korea to command an asset value of over 1 trillion won. The company currently operates four high-end funeral home franchises across the Seoul metropolitan area under the brand “Shillakwon,” which VIG plans to expand nationwide.
As of June 2021, the pre-need funeral service provider had 1.6 million active subscribers, cumulative pre-need deposits of 1.4 trillion won, total assets of 1.7 trillion won, and investment assets of 900 billion won.
“Since VIG’s investment in 2016, when the domestic funeral service industry itself was undervalued, we have transformed Joun Life and then Preed Life into an unparalleled total life care service provider,” said Changhoon Shin, a partner at VIG.
Along with the 10% stake sale, VIG also announced that it completed refinancing of approximately 150 billion won for recapitalisation. The firm expects to recoup most of its initial investment made in 2016.
Established in 2005, VIG Partners invests in small- and medium-sized enterprises across a range of industries such as financial services, consumer goods, online and mobile commerce, and household appliances. Since its inception, it has invested in at least 21 portfolio companies through its three vehicles and now manages over $3 billion in assets.
Last month, the PE firm acquired a controlling stake in BioEnergyFarmAsan, the largest private waste-to-energy facility in South Korea, for over $100 million. It also acquired a 100% stake in home and personal care company The Skin Factory, which sells hair and body care products under the Kundal brand, in May.