Kurly said on the 2nd that it will acquire the remaining shares of Next Kitchen, an affiliate specializing in the planning and development of home meal replacement (HMR) and restaurant meal replacement (RMR) products, making it a wholly owned subsidiary.
The acquisition will be carried out through a small-scale share swap, in which Kurly issues new shares in exchange for Next Kitchen stock. The exchange ratio is 6.6 Kurly shares for each Next Kitchen share. Kurly plans to issue 334,926 new common shares.
Kurly, which currently holds a 46.4% stake in Next Kitchen, will secure the entire remaining stake through the swap. The share exchange is scheduled for Dec. 7, after which Next Kitchen will become a wholly owned subsidiary of Kurly.
The company said the move will strengthen its competitiveness in the prepared-meal business. Kurly plans to bring the entire process in-house — from planning and development of HMR and RMR products through distribution — to improve product quality. The deal is also intended to build up its capacity to export Korean food to overseas markets, including the United States.
Once the subsidiary integration is complete, Next Kitchen plans to appoint Choi Jae-hoon, Kurly's executive vice president and chief commercial officer, as its chief executive. "Next Kitchen has sustained solid growth on the strength of outstanding capabilities in planning and developing prepared meals, along with its operational know-how," Choi said. "This subsidiary integration will further upgrade both companies' competitiveness in prepared meals and their export capabilities."
