Miga Design Architecture, Specialized in Regenerative Construction, Put Up for Sale [fn Market Watch]

[Financial News] Miga Design Architecture, a general construction company specializing in regenerative construction and currently undergoing corporate rehabilitation proceedings, has been put up for sale in the mergers and acquisitions market. The deal will use a stalking horse process, in which a preselected buyer is secured before a public auction. Buyers are expected to focus mainly on the company’s regenerative construction technology and the potential value of its real estate holdings in the Sasang Industrial Complex area of Busan.
According to the investment banking industry on the 26th, Miga Design Architecture has recently been pursuing a rehabilitation-related M&A deal through the stalking horse method. Samil PricewaterhouseCoopers has been appointed as the sale adviser. In a typical stalking horse process, a conditional buyer is secured first, and then a public bidding round is held to attract a better offer. If no rival bidder emerges, the original buyer is confirmed as the final acquirer, reducing transaction uncertainty compared with a standard open sale.
Founded in 2016, Miga Design Architecture has focused on regenerative construction, which remodels and redevelops buildings by using existing structures and land rather than demolishing them completely. The company also operates a regenerative construction research institute and has promoted low-carbon building projects as a core business.
The deal is also drawing attention because of the company’s assets in the Sasang Industrial Complex in Busan. As the Busan Metropolitan City Government works to reshape the area into a key hub for West Busan, the company is seeking to use its trust-held real estate to propose a private housing purchase deal to Korea Land and Housing Corporation (LH).
The direct trigger for the rehabilitation process was high interest rates and a sluggish real estate market. As borrowing costs rose, financing expenses for properties intended for sale increased, and delays in disposal further weakened liquidity. The burden of additional collateral loans and borrowing from second-tier lenders also piled up.
The company filed for rehabilitation in January and received approval to begin proceedings on February 13.
In the M&A industry, the key issues in this transaction are seen as whether the regenerative construction business can be normalized and how much recovery value can be extracted from the company’s real estate holdings.
An investment banking industry source said, "As distressed construction companies continue to come to market amid a weak construction sector, the deciding factor for buyers is likely to be how quickly post-acquisition cash flow can be normalized, rather than the company’s past construction track record."
[email protected] Kim Kyung-a Reporter