Keistone Partners starts sale process of Cardoc

The PE firm recorded an IRR of 33 percent in two years

 

South Korea’s mid-sized private equity firm Keistone Partners has begun a process to sell its portfolio company Cardoc, a local vehicle repair app maker, marking the first exit of its second blind-pool fund.

 

Yuanta Investment has signed a stock purchase agreement (SPA) to acquire 72 percent of Cardoc’s existing shares for approximately 50 billion won ($42 million) from shareholders including Keistone Partners, Stonebridge Ventures and Kakao Investment. Keistone Partners, the largest shareholder of Cardoc, has recorded almost 200 percent return by selling its entire 38 percent stake in the company, with an internal rate of return (IRR) of about 33 percent.

Cardoc has grown rapidly since Keistone Partners has become its largest shareholder. Established in 2013, Cardoc is a car repair cost comparison app provider. The mobile app enables users to upload photos of their damaged cars and receive instant repair estimates from auto shops. In 2018, Keistone Partners acquired a 28 percent of existing shares of Cardoc for around 6.2 billion won from its then-largest shareholder Kakao Investment. The PE firm invested additional 4 billion won to acquire new shares in 2019.

Since its launch in February 2013, Cardoc has grown into a leading platform with 1.8 million cumulative downloads as of the end of 2019, which almost doubled from 2017’s 950,000. The number of repair queries has also increased by 2.8 times from 140,000 in 2017 to 390,000 in 2019.

 

The company’s sales jumped more than 10 times to 21.6 billion won last year from 2.1 billion won in 2017. Market insiders said Cardoc’s growth has been boosted by Keistone Partners’ strategy to improve the company’s enterprise value.

Keistone Partners has decided to sell its stake after reviewing various options to support Cardoc’s further growth, including rights offering. Yuanta Investment’s determination to take over the company has also reportedly affected the PE firm’s decision.

Keistone Partners has successfully exited its investment in Cardoc made through its second blind-pool fund. The PE firm’s 347 billion won fund launched in 2017 has Cardoc, ADT Caps, SIS, C&S Asset Management, LS Alsco and NHN Godo in its portfolio.

 

 

Reporting by Se-hun Jo, the bell