IMM Private Equity said Monday it has signed a binding term to become the largest shareholder of South Korean kitchen and interior furniture goods manufacturer Hanssem in a 1.45 trillion won ($1.24 billion) deal.

Under a sales and purchase agreement, the third-largest buyout firm based in Seoul, with $5.4 billion in assets under management, will buy 6.5 million ordinary shares -- or 27.7 percent of voting rights -- owned by sellers comprising founder Cho Chang-gul and his seven specially affiliated entities. 

The transaction will give the new shareholder rights to virtually control a 37.8 percent stake in Hanssem, according to IMM Private Equity. It added that the deal is expected to reach a close by Dec. 31.

It said in a statement that the deal is under a strategic partnership with Lotte Group, allowing the proposed investor to create synergy with Lotte conglomerate businesses ranging from logistics to rental services, with Lotte Shopping as one of the partnering affiliates.

The announcement came as Hanssem is now facing a legal action posed by Texas-based hedge fund Teton Capital Partners in September. Teton, which held some 8.4 percent stake in Hanssem as of June, filed an injunction with the Suwon District Court in September, asking the court to stop the sales process, including due diligence.

The Korea-focused buyout firm has exited from companies including Hollys Coffee, Tailim Packaging, Taihan Electric Wire and W Concept, among others

Founded in 1986, Hanssem is the largest domestic kitchen furniture maker in Korea. It recorded 93 billion won in operating profit for 2020, up 67 percent from the previous year.