South Korea’s leading software company Tmax Group is set to draw at least 750 billion won ($572.3 million) and a maximum of 1 trillion won from Seoul-based Cactus Private Equity to buy its former unit Tmaxsoft back from local PE house Skylake Equity Partners, banking sources said on Tuesday.
Tmax Group will attract Cactus as a financial investor of Tmaxdata, the group’s business data management affiliate with a more than 1 trillion won in valuation. The group will purchase Tmaxsoft by exercising a call option, sources added.
Cactus is set to fund Tmaxdata’s rights offering or convertible bond issuance by the second quarter of this year.
Once the investment is made, Cactus will co-manage Tmaxdata with group Chairman Park Dae-yeon, who holds a 77.9% stake in the data management firm, according to sources.
CALL OPTION VS PUT OPTION
Tmax Group sold a 60.9% stake in Tmaxsoft, a developer of enterprise software, for 560 billion won to Skylake in March 2022. At the time, the group was granted a call option to purchase Tmaxsoft’s stake for two years from March 15, 2024.
Under the contract, Tmax Group should guarantee at least a 16% internal rate of return for Skylake when exercising the call option.
The group will use the proceedings for exercising the call option and its operating costs. The group spends around 10 billion won in operations per month as the software company focuses on developing a super app, a mobile application that provides various services such as payment and instant messaging.
Meanwhile, Skylake is set to continue to expand Tmaxsoft’s business as a core asset if the financing of Tmax Group and Cactus falls through.
Skylake holds a put option for one and a half years of exercise period. If Tmax Group doesn’t buy back Tmaxsoft within the period, Skylake can take over Tmaxtibro, a database management firm wholly owned by Tmaxdata.
Write to Jong-Kwan Park at pjk@hankyung.com
Jihyun Kim edited this article.