Dongwon Group explores StarKist IPO to fund logistics acquisition

Seoul, South Korea-headquartered Dongwon Group is considering initial public offerings for three of its subsidiaries to pay for an acquisition target.

Dongwon, which has owned StarKist since purchasing it from Del Monte Foods in 2008, is exploring the potential of issuing IPOs for the Reston, Virginia, U.S.A.-based canned tuna company, as well as two of its other subsidiaries, to give it the funds necessary to purchase HMM, South Korea’s largest shipping firm. According to Pulse News, citing industry sources, Dongwon is also considering the listing of logistics specialist Dongwon LOEX, and Foodservice distribution and processing entity Dongwon Home Food.

StarKist achieved 20 percent revenue growth in 2022, according to the Korean news site. StarKist did not respond to a request from SeafoodSource for comment on the report.

Dongwon is pursuing HMM – expected to cost KRW 5 trillion (USD 3.7 billion, EUR 3.5 billion ) – without the support of financial investors, meaning it will be self-funding the expenditure. To do so, besides IPOs, it is also considering taking on debt and liquidating some assets.

Pulse News reported Dongwon has a 53 percent debt ratio, lower than the industry average for holding companies, and has a AA- credit rating, higher than the two other major contenders for HMM: Harim and JKL Partners, and LX International. A sale is expected to be completed through a stock purchase agreement by the end of 2023.

According to Pulse News, Dongwon, which has KRW 517 billion (USD 386 million, EUR 361.6 million) in cash assets, is now assessing its corporate value and will subsequently embark on pre-IPO efforts, which may include attracting investments, liquidating family owners’ stakes, and pursuing M&A funding.

Separately, StarKist has chosen Coyne PR to lead its public relations efforts, which will include an amplification of the company’s mascot, Charlie the Tuna, in its advertising efforts, according to PR Week.

Photo courtesy of ReSawn Timber Co.