IMM Private Equity (IMM PE) is selling its management stakes in Taihan Electric Wire Co., six years after it took over the company.
IMM PE, which owns 61.3 percent stake in Taihan, has chosen KPMG Korea as an accounting advisor to lead the sale, according to sources familiar with the situation on Monday. Taihan is reportedly said to have already signed a non-disclosure agreement with a potential buyer.
KPMG Korea has conducted due diligence since last month and is entering the final stage, the sources said. IMM PE is expected to gain up to 1 trillion won ($ 0.81 billion) from the potential sale.
LS Cable, an affiliate of LS Group, is being mentioned as the most likely candidate for the takeover among major companies in the wire industry.
In 2014, LS Group Chairman Koo Ja-yeol had downplayed the possibility of a takeover of Taihan by saying that it would be practically impossible to acquire the cable maker due to concerns over the monopoly controversy.
The possibility of LS Cable acquiring Taihan rose in June last year after the Ministry of Industry designated the cable maker’s technologies, the super-high-pressure power cable system of utilities, as “national core technology”, making it less likely that its management rights would be sold abroad.
Kumho Electric Inc. and Iljin Electric are also mentioned as possible takeover candidates for Taihan. And the possibility of a takeover by KG Family and Hyosung Group, which showed interests in Taihan when KPGM Korea acquired it, cannot be ruled out, according to industry sources.
One IMM PE source, however, denied the immediate sale of Taihan, saying that the sale process has not yet officially started.
Taihan’s business performance has been steadily improving since the IMM takeover. Last year, it reported sales of 1.5 trillion won and operating profit of 32.3 billion won. (Reporting by Ki-soo Park)