Failure Story of Mythic Venture
Pantech Inc. will sell its last Internet of Things (IoT) business division soon and disappear in its history. There are decisive factors left but the company is expected to be dissolved by the end of this week.
According to industry sources on August 29, Solid has decided to sell Pantech’s IoT division to Woori Net, a South Korean optical communication equipment developer and manufacturer, and is preparing to finalize the contract. Initially, the company planned to finalize the agreement with Woori Net by the end of last month and earlier this month at the latest. However, the plan was delayed for a month as Pantech’s employees strongly opposed to the sale by reason of succession of employment and sought to find a new buyer.
Woori Net said, “The paradigm of existing communication equipment is rapidly changing. We are acquiring Pantech’s IoT business division as part of our plans to diversify businesses to create profits.”
When the two companies sign the final agreement, Pantech will hand over all the data and documents that are related to new IoT products, existing products and materials, research equipment and production to Woori Net. However, Woori Net has already hired all employees required so only some of Pantech’s employees in the R&D and sales departments will be transferred.
Woori Net is planning to seek out a new growth engine in the IoT sector as its sales growth has started to flatten down. The company was founded in 2000, listed in the KOSDAQ in 2010 and acquired by a private equity fund in 2012. Currently, it runs wired equipment business that connects telecommunications service providers and end users and transacts business with the nation’s three mobile carriers, Samsung Electronics, KORAIL and Korea Rail Network Authority, establishing a total control center at Busan Subway and wireless train communication networks that link every station.
Woori Net saw its sales decrease by 8.6 percent from 49.6 billion won (US$44.05 million) in 2015 to 45.3 billion won (US$40.23 million) last year, showing a minus growth. The company’s operating profit reached a record high of 7 billion won (US$6.22 million) in 2008 and then continuously dropped from 5.5 billion won (US$4.89 million) in 2009 to 4.1 billion won (US$3.65 million) in 2013 and 2.2 billion won (US$1.96 million) last year. Woori Net is making an every effort to develop the IoT business, which has a high growth potential, and next-generation mobile communication technologies In order to turn around performance. The company is now co-developing quantum cryptography transmission equipment with SK Telecom.
Meanwhile, Pantech will be dissolved and only its patents will remain when the sale is finalized. Solid will run the company for a while in its bid to sell Pantech’s patents. Solid sold its 230 U.S. patents to Gold Innovation in October last year and 11 of them, including “Love Canvas,” were sold to Apple. Pantech still has about 3,000 patents at home and abroad. Creditors are highly likely to have disputes on lucrative patents.