Private equity firm Dominus Investment has acquired redeemable convertible preference shares worth 40 billion won ($37 million) issued by semiconductor and electronic components manufacturer SI Flex, industry sources said on Monday (December 7).

It will own about 20% of the company when they are converted into common shares. The PE firm has made the investment through its blind-pool fund NV Global Korea Mezzanine.

SI Flex will use the proceeds to repay existing financial investors, including Shinhan BNP Paribas Asset Management and Hyundai Motor Securities, and boost working capital for next year. It is expected to spend 30 billion won on repayments and 10 billion won on working capital.

Founded in 1988, SI Flex designs, produces and markets flexible printed circuit boards (FPCB) for customers in the audio/video, computer, camera, VCR, mobile phones and digital camera manufacturing industries worldwide, including Samsung, Hyundai, LG and Sony. It recorded revenue of 506.4 billion won in 2019 on a consolidated basis, up 5.5% on the previous year.

“FPCB manufacturers are benefitting from increasing adoption of OLEDs in smartphones,” said an industry source, adding, “The number of cameras in smartphones is increasing and this is boosting FPCB manufacturers’ performance.”

The global FPCB market is likely to grow to $15.2 billion in 2020 from $11 billion in 2014, with compound annual growth rate (CAGR) of 5.5% between 2015 and 2020, according to Korea Institute of Science and Technology Information. Leading the way is the Asia Pacific FPCB market, which is expected to grow at a CAGR of 6.7% to $9.2 billion in 2020 thanks to an increasing supply of mobile devices.

SI Flex shifted its production from China to Vietnam last year to improve efficiency. The company is expected to proceed with its planned initial public offering, though this could depend on the Covid-19 pandemic. (Reporting by Ar-rum Rho)