SM Entertainment: Disposal of Non Core Assets - SM C&C and KeyEast

• On 21 August, SM Entertainment announced that it will sell its non-core assets including its controlling stakes in SK C&C and KeyEast.

• The combined sales amount could be about 110 billion won or more, representing 7% or more of SM Entertainment's market cap.

• Sale of SM C&C and KeyEast is likely to have a positive impact on SM Entertainment by selling its non-core assets and improving its balance sheet for higher shareholder returns.

Photo by Sergio Ruiz on Unsplash

On 21 August, S.M.Entertainment Co (041510 KS) announced that it will sell its non-core assets including its controlling stakes in Sm Culture & Contents (048550 KS) (SK C&C) and Keyeast Co Ltd (054780 KS).SM C&C is a media company engaged in advertising, video content production, management, and travel. KeyEast focuses on actor management.

About a year ago, SM Entertainment mentioned that it would sell some of its non-core assets but there have not been much progress in the past year. Deloitte Anjin, the lead manager for the sale of SM C&C and KeyEast, recently distributed teaser letters to multiple private equity funds (PEFs) and strategic investors (SIs). The two deals will be carried out as separate deals.

The sale of SM C&C and KeyEast is likely to have a positive impact on SM Entertainment as the company is selling its non-core assets and improving its balance sheet for potentially higher shareholder returns and further investments in its core business.