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.
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.
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