The management negotiation of DOUZONE, a domestic enterprise resource planning (ERP) company, has not made progress. Reports suggest that negotiations are delayed due to difficulties in discussions with large domestic and foreign private equity funds regarding the company's media handling solutions.
According to a comprehensive report by ChosunBiz on the 11th, some private equity funds interested in acquisition, including EQT Partners, and DOUZONE Chairman Kim Yong-woo (64) reportedly disagreed on the handling direction of media equity and assets during the negotiation process related to Chairman Kim's equity stake (21.51%) sale.
DOUZONE owns BizWatch through Electronic Newspaper and Tax Watch, as well as its subsidiary DOUZONE BNC. DOUZONE BNC operates a museum, with Chairman Kim holding a 94.39% equity stake.
An industry source noted, 'The most important aspect of the equity sale is the price of the equity,' while also mentioning, 'There are differing views between DOUZONE and private equity funds on how to handle the media.'
The source added, 'I understand that some private equity funds feel burdened by taking on the media together when acquiring DOUZONE.'
Initially, BizWatch had DOUZONE Holdings as its largest shareholder. DOUZONE Holdings transferred shares of BizWatch to DOUZONE BNC in August 2022.
The following year, DOUZONE resolved to absorb DOUZONE Holdings and also acquired the Electronic Newspaper from Hoban Construction. Tax Watch, a media specializing in taxes that originated from BizWatch, currently has DOUZONE holding a 67.8% equity stake.
Even if Chairman Kim sells his equity, the media such as the Electronic Newspaper will still be affected by DOUZONE. Chairman Kim is not prioritizing the media in discussions, but private equity funds are reportedly hoping to sell or separate the media first before acquiring Chairman Kim's equity. This indicates a focus on the areas of enterprise resource planning, groupware, and electronic tax invoices.
In particular, concerns have been raised about potential employee resistance if equity is acquired and then media sale or separation is pursued, which has been a burden in relation to the business direction that private equity funds want to pursue.
There have also been discussions about private equity funds acquiring Chairman Kim's equity while the media is purchased by DOUZONE BNC, which holds BizWatch, meaning DOUZONE would solely acquire its main body without the media.
A lawyer advising on mergers and acquisitions explained, 'Private equity funds might try to lower the equity price by mentioning elements they do not want to inherit.'
A DOUZONE representative stated regarding the equity sale, 'Chairman Kim has received a sale proposal from investors, but specific details such as the sale price have not been finalized.'