A final bid to acquire South Korea’s waste management companies, Korea Environment Technology (Koentec) and Saehan Environment, is expected to take place at the end of this month.
Shortlisted candidates for Koentec and Saehan Environment are currently in the middle of the management presentation process, sources familiar with the matter said on Tuesday. STIC Investment, a consortium of E&F Private Equity and IS Dongseo, TSK Corporation, Stonepeak Infrastructure Partners and Hoban Construction are mulling over the acquisition.
The final bidding is slated to take place on May 25. The seller is likely to receive binding offers from shortlisted contenders by the end of this month. The seller opened its virtual data room (VDR) on April 20 and allowed prospective buyers to conduct due diligence on the company. Shortlisted bidders set their bid price after going through VDR due diligence, management presentation and on-site due diligence for a month.
Despite MBK Partners’ walking away from the deal, the remaining prospective buyers are seriously conducting their due diligence while drawing up funding plans at the same time. Some candidates are discussing a possible consortium.
In addition to the consortium of E&F PE and IS Dongseo, global infrastructure-focused PE firm Stonepeak is discussing the possibility of forming a consortium with Hoban Construction, although nothing has been decided. If formed, a possible consortium of Stonepeak and Hoban Construction may emerge as the dark horse of the final bid.
The consortium of E&F PE and IS Dongseo is garnering attention from industry watchers, with both companies actively investing in multiple environment and waste companies.
TSK Corporation, which has recently participated in M&A deals relating to environment and waste business, is reinforcing the business as its new growth engine. The company has hired Woori Bank to arrange financing for the acquisition of Koentec and Saehan Environment.
STIC Investment plans to use its one trillion won special situation fund 2 for the deal. Market observers expect heated competition over the company among the remaining contenders although some prospective buyers walked away from the deal. (By reporter Kim Hye-ran)