Daesang Corporation Acquires Lucky Foods in Oregon

Daesang Corporation, a public company based in Seoul, South Korea, and listed on the Korean Stock Exchange, operates in the food manufacturing sector. It acquired Lucky Foods, an Asian food manufacturer based in Oregon, United States, on June 19, 2023. Daesang acquired Lucky Foods to expand production and use Lucky Foods’ distribution channels in the United States.

Transaction Summary

The Facts of the Acquisition

  • Target: Lucky Foods is a family-run manufacturer of authentic Asian food, based in Oregon, United States. It sells its products online and through distributors and sells under the brand “Seoul Kimchi.”
  • Acquirer: Daesang Corporation is a large multinational food manufacturer based in Seoul, South Korea. It has offices in Vietnam, China, Japan, the Netherlands, and Indonesia and owns the brands Jongga, O’Foods, Miwon, and Chungjungone. Recently, Daesong set a vision to expand its operations into the United States and has aggressive targets for expansion by 2030. It has completed construction of its first kimchi (salted, fermented vegetables) factory in Los Angeles, California, and hopes to penetrate the U.S. market.

Our Take on the Acquisition

Daesang (acquirer) has a history of success within Korea and the Asian markets like China, Indonesia, Japan, and Vietnam. Acquiring Lucky Foods (target) should be considered a stepping stone in its vision to expand in the United States. Daesang plans to invest in expanding and upgrading Lucky Foods’ factory. Daesang aims to double production capacity and enhance automation in production. The company also plans to strengthen Lucky Foods’ sales and marketing. The acquisition will give Daesang a better foothold in the United States as it can use Lucky Foods’ existing distribution network to sell Daesang’s other products. Plus, Daesang’s kimchi factory in Los Angeles can also be used to produce Seoul Kimchi, which may have garnered more brand awareness than Daesang’s other brands.

The Transaction

Date:June 19, 2023
Purpose: To expand into the United States market
Acquirer’s Statement:A Daesang official said – “We will accelerate the expansion of the kimchi business in the U.S. market through the acquisition by utilizing Lucky Foods’ product power and its infrastructure in the States. We are planning to strengthen marketing and research and development for our products in the U.S. too.”

Target/Seller: Lucky Foods

Company Information

Target:Lucky Foods
Industry: Food Manufacturing – Asian Foods
Type:Private, family owned
Employees:28 (Unconfirmed Source: Kona Equity, a market intelligence firm)
Locations:Corporation Headquarters and Manufacturing Unit: 11847 SW Itel St. Tualatin, Oregon, United States

Product Information 

Products:Kimchi – Fermented Korean dish made with seasoned vegetables 
Korean Sauces – Specialty sauces popular in Korea, made from authentic recipes and ingredients
Korean-Style Pancakes – Savory snacks made from vegetables, mushrooms, and kimchi (salted, fermented vegetables)
Spring Rolls – Ready-to-fry rolled snacks with a vegetable filling
Sweet Pickled Ginger – Ready-to-eat pickled ginger, sometimes eaten with sushi
Market Reach:United States

Financial Information 

Revenue:USD $5.23 million (Unconfirmed Source: Kona Equity)
Revenue per Employee:USD $186,893 (Estimated based on the number of employees and the information from Kona Equity)

Target/Seller Overview: Lucky Foods

Lucky Foods is a family-owned-and-operated Asian food manufacturer. The family immigrated to the United States in the 1970s and started the business in 1980. Lucky Foods specializes in authentic Asian appetizers. It focuses on nutritious, all-natural, healthy foods. All cuisines are free from genetically modified organisms, or GMOs, and monosodium glutamate, or MSG. They contain no preservatives, additives, or artificial flavors, and are trans-fat free using only the best local fresh ingredients. Lucky Foods provides a 100% vegetarian, natural, and healthy option for its customers. The company’s Seoul Kimchi brand accounts for two-thirds of its overall business, and it diversifies its business with various product lines, such as sauces and spring rolls.

Lucky Foods’ products are sold both online and through distributors.

Buyer/Acquirer: Daesang Corporation

Company Information

Buyer:Daesang Corporation
Industry: Food and Beverage Manufacturing – Asian Foods
Type:Publicly Listed Company
Employees:3,025 (Source: Pitchbook)
Head Office #1: Daesang Building, 26 Cheonho-daero, Dongdaemun-gu, Seoul, Korea
Sales Office #1: 4F Daesang Building, 470 Myeonmok-ro, Jungnang-gu, Seoul, Korea
Research Institute: Daesang Central Research Institute, 697 Jungbu-daero, Mahjong-myeon, Icheon-si, Gyeonggi-do, Korea
Factory #1: Dongtangiheung-ro 681beon-gil, Giheung-gu, Yongin-si, Gyeonggi-do, Korea
Factory #2: 51 2gongdan 5-ro, Seobuk-gu, Cheonan-si, Chungcheongnam-do, Korea
Factory #3: 360 Dunchon-daero, Hungwon-gu, Seongnam-si, Gyeonggi-do, Korea
Factory #4: 621-27 Gajang-ro, Osan-si, Gyeonggi-do, Korea
Factory #5: 30 Sunchang-ro, Sunchang-eup, Sunchang-gun, Jeollabuk-do, Korea
Factory #6: 36 Daegangnonggong-gil, Daegang-myeon, Danyang-gun, Chungcheongbuk-do, Korea
Factory #7: 15 Cheongyong-gil, Hoengseong-eup, Hoengseong-gun, Gaangwon-do, Korea
Factory #8: 48-38 Cheomdangieop 5-ro, Sandong-myeon, Gumi-si, Gyeongsangbuk-do, Korea
Factory #9: 127 Seokgang 3-gil, Gajo-myeon, Geochang-gun, Gyeongsangnam-do, Korea
Factory #10: 208 Oehang 1-gil, Gunsan-si, Jeollabuk-do, Korea
Factory #11: Daesang 884 Oehang-ro, Gunsan-si, Jeollabuk-do, Korea
Factory #12: 57 Oehang 4-gil, Gunsan-si, Jeollabuk-do, Korea

Head Office #2: Room B-301, Wanxiangcheng, Wuzhong Road, No. 1799, Minhang District, Shanghai
Liaison Office #1: Room 301, 315, Building B, Shanghai MixC, No. 1799, Wuzhong Road, Minhang District, Shanghai, China
Regional Office #1: 3A02, Building A, Boya International Center, No. 1 Lize Middle 1st Road, Chaoyang District, Beijing, China
Regional Office #2: 21C, Block 4, Building 1, Tanglang City Plaza, East District, Liuxian, Shenzhen, China
Regional Office #3: 668, Baoshan Road, ED-Area, Tanggu, Tianjin, China
Regional Office #4: Unit 1404. 14/F, Tower 1, Magnet Place, 77-81 Container Port Road, Kwai Chung, New Territories, Hong Kong
Factory #13: No. 12 Keji Road, Miyun Economic Development B, Beijing, China
Factory #14: No. 26 Shenzhou Road, High-tech Industrial Development Zone, Donghai County, Lianyungang City, Jiangsu, China

Regional Office #5: JI. Perintis Kemerdekan No. 1-3 Pulo Gadung, Jakarta, Indonesia
Factory #15: Jl. Pepelegi Indah No. 1 Waru Siadoraji, Surabaya, Indonesia
Factory #16: Kec. Driyorejo, Kab.Greesik KM 24 Jawa Timur, Indonesia

Regional Office #6: 104 Hamariktu Parkside Place, Tsukiji, Chuo-ku, Tokyo, Japan

Liaison Office #2: Room 115, Yangon Hotel Office Building 1, No. 91/93, Pyay Road, 8th Mile Junction, Mayangone Township, Yangon, Myanmar

Regional Office #7: Van Heuven Goedhartlaan 935, 1181 LD Amstelveen, Netherlands

Head Office #3: Unite 1101, Antel Global Corporate Center, Ortigas Center, No. 3 Dona Julia Vargas Ave., Pasig City, Philippines
Sales Office #2: 708 7th Floor Taipan place B/D Emerald Ave. Ortigas Pasig City, Philippines
Factory #17: Purok 6, Tablon, Cagayan De Oro City, Philippines

Liaison Office #3: 6F, 89/15, Lenina Str., Berdsk City, Novosibirskaya Oblast, Russian Federation

Liaison Office #4: Suite C, 38th floor, Ocean Tower 2, Sukhumvit 19, North Klongtoey, Wattana, Bangkok, Thailand

United States
Head Office #4: One University Plaza, Suite 603, Hackensack, New Jersey, United States
Regional Office #8: 2040 Davie Ave, Commerce, California, United States

Head Office #5: 19-8 Street, Mai Dich Ward, Cau Giay Dist., Hanoi, Vietnam
Regional Office #9: Seaprodex Building, 3rd Floor, 20 Lang Ha, Dong Da, Hanoi, Vietnam
Factory #18: Song Thao Str., Tho Son W., Viet Tri, Phu Tho Prov., Vietnam
Factory #19: Block 14, Linh Trung EPZ II, Binh Chieu W., Thu Duc Dist., Ho Chi Minh City, Vietnam
Factory #20: B2, Phuoc Minh W., Duong Minh Chau Dist., Tay Ninh Prov., Vietnam
Factory #21: Lieu ha commune, Tan Lap ward, Yen My district, Hung Yen province, Vietnam

Product Information 

Products:Cooked meals – Ready-to-eat meals 
Kimchi – Fermented Korean dish made with seasoned vegetables 
MSG – Monosodium glutamate is a sodium salt and is used as a flavor enhancer
Noodles – Unleavened dough rolled flat and cut, stretched into long strips
Sauces – Specialty sauces made from authentic ingredients
Seasoning – Herbs, spices, and salt to enhance flavor
Sweeteners – Additive to enhance sweetener and a sugar alternative
Tea – Aromatic beverage prepared with hot water over cured or fresh tea leaves
Market Reach:Asia: China, Hong Kong, Indonesia, Japan, Myanmar, Philippines, Russia, South Korea, Taiwan, Thailand, and Vietnam
Europe: Netherlands (and the European Union)
North America: United States 

Financial Information 

Market Cap:USD $470 million (2022) – Korea Stock Exchange
Revenue:USD $3.16 billion (2022)
Revenue per Employee:USD $1.05 million (Estimated based on the number of employees as reported on Pitchbook and revenue from audited financial statements)
EBITDA:USD $200.07 million (2022)
P/E Ratio:9.52
EV/EBITDA Ratio: 5.7x

Buyer/Acquirer Overview: Daesang Corporation

Daesang Corporation was established in 1956 with domestic capital and technology and strives to be a company that creates a healthy food culture. For the past 60 years, it has been one of the world’s top 3 companies specializing in fermentation. Fermentation is a process where small living things like bacteria and yeast transform sugars into new flavors and textures in food and drinks. Daesang has also been recognized as the leading general food company in Korea. It went public in 1969 to expand operations in other Asian countries.

Daesang Corp is a part of the packaged foods industry. It is one of South Korea’s leading producers of consumer foods and food additives, cornstarch, and other wet corn milling products. Daesang is Korea’s leading producer of MSG, with a market share of approximately 75%. In addition to MSG, Daesang has a fermentation business that produces a variety of artificial sweeteners. The company’s business relates to the production and distribution of food items such as marinade sauces, canned foods, seasonings, soups and noodles, and health foods and beverages. It also sells food ingredients, such as corn syrup, crystalline fructose, corn syrup, corn starch, fish paste starch, and others. Its marketing channel comprises direct sales through stores and sales agents.

While the majority of Daesang’s sales come from South Korea, the company has a long-established international presence, with production plants in Indonesia and Vietnam, and trade subsidiaries in Europe, Japan, the United States, China, and other Asian markets.

Assorted foods produced by Daesang Corporation and its subsidiaries.
Daesang’s first kimchi manufacturing plant in the United States.
Daesang factory in Vietnam

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