[K-INVESTORS] The Top M&A Advisor's Know-How: "Become Someone to Trust"

Sungpyo Hong, Co-Head of the Samil PwC M&A Center
Building Trust Through Shared Journeys With Clients, Advising Groups Like SK
"Delivering Specialized Sell-side Advisory Services"

"You can't just meet someone for the first time yesterday and do a deal with them tomorrow. You have to build trust and establish a strong relationship over many years before you can eventually advise them. That, I believe, is the essence of our business."

Sungpyo Hong, Co-Head of the M&A Center (Partner) at Samil PwC, made this statement during a recent interview with The Asia Business Daily, explaining the most important principle of mergers and acquisitions (M&A) advisory. While the M&A market in the first half of this year was assessed as sluggish except for a few large-scale deals, Samil PwC secured the top spot in the M&A advisory field across various league tables during the same period. Hong attributed this achievement, even amid a 'deal drought,' to the trust the company’s team members have built with clients and their long-term personal networks over the years.

Sungpyo Hong, Co-head of the M&A Center at Samil PwC, is being interviewed by The Asia Business Daily at the Samil Accounting Corporation office on Hangang-daero, Yongsan-gu, Seoul.

Trust is the Core of M&A Advisory...“You Have to Be a Trusted Person”

Hong connected with SK Group as soon as he entered the accounting industry. After joining Samil PwC in 2000, he began working on matters related to SK C&C (now SK AX). At that time, SK Group's key pillars were Yukong (now SK Innovation), Korea Mobile Telecom (now SK Telecom), and SK Trading (now SK Networks). This was before SK hynix, the leading semiconductor company, was acquired, so the group had not yet reached its current size.

Having grown together with SK Group for over a decade, Hong also advised on the 2015 merger between SK C&C and SK. At that time, the SK Group announced plans to merge holding company SK with information technology (IT) company SK C&C, aiming for simplified governance and new growth engines through business integration. Although the merger was approved by 87% of shareholders present at the shareholders' meeting, there were some hurdles, such as opposition from the National Pension Service, the second-largest shareholder, due to concerns over the merger ratio and the timing of treasury share cancellation possibly undermining shareholder value. Hong, who participated as the key advisor, recalled that he worked through the night, struggling alongside the client. He said, "From that point onward, people at SK began to see me as 'someone truly trustworthy.'" After that, Samil PwC outpaced other investment banks to exclusively handle SK Group's sell-side advisory business. Hong has since handled advisory services for SK Encar's (now K Car) sale and the U.S. AI solutions affiliate 'AI Company' related to SK hynix.

Through joint growth with corporate clients, Hong expanded his area of expertise. He broke into the K-beauty sector after advising Kolmar Group, a leading cosmetics contract manufacturing company. He provided portfolio restructuring advice, including bolt-on strategies (strategies to complement and strengthen the existing business) for Kolmar Group. Both the case where Kolmar Group raised funds for the 1.3 trillion won acquisition of CJ Healthcare by selling its contract manufacturing (CMO) business, and the acquisition of Yonwoo, the number one cosmetics packaging company, were handled by Hong. Through such deals, Korea Kolmar has risen to the top of the cosmetics ODM (original development manufacturing) industry, posting record results in the second quarter of this year and joining the ranks of large corporations.

Seongpyo Hong, Co-Head of M&A Center at Samil PwC, is being interviewed by The Asia Business Daily at the Samil Accounting Corporation office on Hangang-daero, Yongsan-gu, Seoul.

During the acquisition of the cosmetics brand Gudai Global’s Serin Company and Gudai Global’s fundraising process, Hong approached the advisory work as if it were his own, just like during the SK merger. Gudai Global, seeking to secure funds for the acquisition of Serin Company, set its fundraising target at 800 billion won. Hong accompanied Gudai Global's Chief Financial Officer (CFO) to visit six private equity fund (PEF) operators all day to attract investment—managing to pool the entire target amount within the day. "In the K-beauty sector, trust was built as both I and the client grew together," he said.

Hong explained that his own experience mirrors Samil PwC’s growth trajectory. He added, "Partners have built today’s Samil PwC by systematically accumulating a legacy of networks and trust, without significant departures from the firm."

From Major Corporations to Mid-sized Firms...Samil PwC Claims 'Sell-side Advisory' Expertise

Samil PwC has begun to strengthen its M&A advisory capabilities for mid-sized and small businesses in addition to major corporations. The M&A Center, where Hong serves as Co-Director, primarily handles sell-side advisory for mid-sized companies and individual owners. This center is seeking synergy this year by integrating with the Middle Market Group, which had handled similar tasks. Together with Jin-Oh Hong, Deputy Director of the Middle Market Group, Hong will carry out the mission of 'specializing in sell-side advisory'.

He stated that the synergy from combining the two groups is already evident—especially in simultaneously advising on both the sell-side and buy-side. "Since clients often want confidentiality, we internally match buyers to ensure there are no M&A rumors," Hong said. "Naturally, we strictly uphold the Chinese Wall."

He also cited the cultivation of sector-specific experts as a key benefit of the integration. "When a client requests advisory services—say, a semiconductor deal—rather than scrambling to find someone with relevant experience at the moment, we proactively train specialists so that we can immediately deliver consultation," he said. Having started this preparation two years ago, Hong noted that the M&A Center has experts in semiconductors, beauty, energy infrastructure, and other fields, and that these match closely with those designated by the National Growth Fund—something he views positively. He added, "By preparing in advance over the long term, I want our clients to be able to perceive a qualitative difference when they receive the results."

This content was produced with the assistance of AI translation services.