Tailim Packaging Co. and Tailim Paper Co. will join the brisk Korean M&A pipeline in a bundled deal that could be worth 1.5 trillion won ($1.3 billion) amid online and mobile shopping boom that translates into that much of demand for packaging and board paper.

According to sources from the investment banking industry on Thursday, local private equity IMM PE plans to sell a 70 percent stake in Tailim Packaging and full stake in Tailim Paper. Its lead manager Morgan Stanley will send out teaser letters to potential buyers early March.

Shares of Tailim Packaging closed Friday 1.8 percent lower at 4,640 won. Tailim Paper is not publicly listed on the market.

IMM PE in 2015 bought equities tantamount to 58.9 percent in Tailim Packaging and 34.54 percent in Tailim Paper from company founder Jung Dong-sup at 275.5 billion won and 73.5 billion won, respectively.

Market experts estimate the fund may seek as much as 1.5 trillion won, given the expansion in the duo since the acquisition.

The combined operating profit of Tailim Packaging and Tailim Paper from January to September last year amounted to 100.6 billion won, increasing nearly three-fold from 35.5 billion won of the same period in 2017. Sales came at 822.3 billion won during the period last year, projected to surpass 2017’s annual revenue of 1.03 trillion won.

Their strong performance largely owed to growing demand for packaging materials such as paperboard and Styrofoam in line with the burgeoning online and mobile e-commerce market.

Potential candidates are industry rivals Hansol Paper Co., Asia Paper Manufacturing Co. and Shindaeyang Paper Co. to up economies of scale. Some overseas paper firms who look to enter the Korean market also have also shown interest, according to market sources. The paper companies may form a consortium with financial investors to enter the buyout race, sources said.

By Jin Young-tae and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]