Headland Capital Partners has acquired a majority stake in YoungToys Inc., a designer, manufacturer and distributor of toys in South Korea. Specific terms of the deal were not released. Headland, investing through its Headland Private Equity Fund 6 L.P., now holds 96.5% of the company.
Headland Capital Partners Limited (“Headland”) has announced that The Headland Private Equity Fund 6 L.P. (“HPEF6”), has acquired a 96.5% equity shareholding in YoungToys, Inc. (“YoungToys”). YoungToys is engaged in the design, manufacture and distribution of toys in South Korea, with market leadership positions in the car/robot transformer and fashion/big doll market segments. The company’s major products are the Tobot car/robot transformer, targeting 3-6 year old children, and Jouju and Kongsuni dolls, for 1-6 year old girls.
Since 1998, Headland has completed 18 investments in South Korea, with a cost of approximately US$780 million, primarily in the consumer and industrial manufacturing sectors. Within the consumer sector, Headland views the toy market as attractive because of the projected steady growth rate, the increasingly significant entry barriers and the consolidation trend in favour of the leading players with established brands and relationships with cable TV companies and discount stores. In particular, the growth of the toy market in South Korea is expected to be driven by GDP per capita growth and increases in toy spending per child, as spending levels grow from a relatively low base to levels more in line with economically advanced countries.
YoungToys is a pioneer in the South Korean toy market, having successfully launched its own brands, backed by an animation-linked business model which is expected to be the dominant toy business model in the future. As a result of its market-leading capabilities in the design and production of animated content and toys and its strong marketing and distribution relationships, YoungToys is expected to increase its sales and profit through the expansion of its core product ranges and the development of licensing-out opportunities.
Mr. Taigon Kim, Senior Partner, Headland Capital Partners, commented: “We are delighted to have been able to acquire YoungToys. The company has a strong product line-up with significant growth potential. The management team has been highly innovative in moving the company up the value chain by developing its own characters and pioneering the animation- linked business model in South Korea. We will help the company expand from its solid base, working with management to increase its sales and profitability.”
Mr. Chan Hee Han, CEO, YoungToys, stated, “We are looking forward to our partnership with Headland. We believe that Headland will help us to expand our product range, to evaluate more systematically our pricing and marketing strategies and to introduce enhanced employee incentivisation schemes. Our aim is to become the leading domestic toy company.”
About Headland Capital Partners
Headland Capital Partners Limited, formerly, HSBC Private Equity (Asia) Limited, has been advising private equity and venture capital funds since 1989. Headland endeavours to be a trusted and commercially-minded investment partner for entrepreneurial management teams in Asia and strives to assist these teams to build upon or achieve industry leadership positions for their businesses. The firm believes such partnerships support these companies and their management teams to attain sustainable financial success while delivering attractive returns for its advised funds.
During its history, Headland has advised six regional private equity funds, with aggregate capital of approximately US$2.9 billion. Current active funds, with committed capital of approximately US$2.0 billion, include: The Headland Private Equity Fund 6 L.P. and The Headland Private Equity Fund 3 Limited. Funds advised by Headland have invested in more than 100 companies located primarily in Greater China, South Korea and Southeast Asia.