American global investment firm Kohlberg Kravis Roberts (KKR & Co Inc) has been named as the preferred bidder to buy industrial and medical waste treatment firm ESG Co Ltd, The Korea Economic Daily (KED) reported on June 9, citing investment bank sources.
KED says Hong Kong-based private equity fund (PEF) Anchor Equity Partners, the owner of ESG, has selected KKR as the preferred buyer with Citigroup Global Markets managing the sale.
KKR plans to buy a 100 percent stake in the unlisted ESG and 77.84 percent of one of its seven units, ESG Cheongwon Co Ltd in a deal worth about 800 billion won ($670 million).
KKR reportedly competed with several other big-name infrastructure investment companies which were showing interest in the growth potential of the medical waste treatment market.
The mergers and acquisitions market for South Korea’s waste treatment firms remains robust, showing little impact from the coronavirus pandemic. The firms are generating positive cash flows as the expansion of treatment capacity is strictly restricted by environmental regulations regardless of the high demand.
Medical waste in South Korea more than doubled to 219,000 tons in 2017 from 91,000 tons in 2008, according to the environment ministry’s research. The treatment price nearly doubled to more than 1 million won per ton in 2019, versus 513,000 won in 2010. (Reporting by Jinwon Lee)