U.S.-based private equity (PE) firm Crescendo Equity Partners has invested 90 billion won ($81 million) in Seojin System through a convertible bonds issue, marking its third investment in the aluminum case maker for telecom equipment in seven years.
Founded in 1996, Seojin System was listed on the KOSDAQ market in 2017. It provides metal products to 150 companies worldwide, including Samsung Electronics, and has one subsidiary in South Korea, five in Vietnam, two in China and one in the U.S.
Seojin System’s revenue amounted to 392 billion won in 2019, up from 325 billion won in 2018 and 238 billion won in 2017, and its operating income rose to 54 billion won, from 37 billion won in 2018 and 18 billion won in 2017. The firm is estimated to have generated revenue of 329 billion won and operating income of 20 billion won in 2020.
Industry watchers expect the company to benefit from a deal Samsung Electronics signed with American mobile carrier Verizon this year for the supply of 5G wireless equipment. It is likely to generate more revenue by providing 5G wireless equipment to major mobile carriers in Japan and Canada.
Market insiders expect Seojin System’s revenue to surpass 500 billion won in 2021, with operating income of more than 60 billion won.
Crescendo bet 20 billion won on the company’s technology and growth potential in 2015, and saw its revenue increase nearly fourfold from 45 billion won in 2015 to 167 billion won in 2016. The PE firm increased its investment to 60 billion won in 2019.
Crescendo plans to use its networks in the semiconductor and electronic vehicles sectors to export Seojin System’s products.
The PE firm is expected to own around 18% of Seojin System if its entire holdings are converted. Seojin System chief executive Jeon Dong-kyu, who was the largest shareholder with a 32% stake in September 2020, is unlikely to see his stake diluted by the investment. He jointly invested 30 billion won when Crescendo made its investment in 2019 and purchased convertible bonds worth 20 billion won in the latest deal.
Crescendo mainly focuses on growth-oriented investments on IT and technology companies with high potential, and is backed by Peter Thiel, co-founder of PayPal. (Reporting by Si-eun Park)