KKR completed the acquisition of waste company Eco Green Holdings from Anchor Equity Partners for 875 billion won ($737 million) on August 19, three months after the deal was inked, industry sources said.
It is the first of three hotly-contested sales of South Korean waste management companies to be wrapped up. Macquarie Korea Asset Management is also selling Koentec to a consortium led by IS Dongseo and Affirma Capital is offloading EMC Holdings to SK Engineering & Construction.
The acquisition price for Eco Green Holdings is four times greater than Anchor Equity Partners’ total investment in the firm, which is said to be about 200 billion won. The firm has also made partial exits through three rounds of recapitalization.
However, some industry watchers said it seems to be exiting too soon, noting that the company could have been sold later at a higher price, given its growth potential. Anchor Equity Partners apparently chose to sell now to benefit from strong interest from investors, after approaches from potential buyers in the past couple of years.
Among them were KKR and Stonepeak Infrastructure Partners. Anchor Equity Partners entered into private negotiations with both firms earlier this year, and in June announced that it had reached a deal with KKR.
Anchor Equity Partners started to build up its portfolio in the South Korean waste sector in 2016 by acquiring ESG Cheongwon, a firm in Chungcheong Province, for 60 billion won. It later added other waste companies across the country, including some in Jeolla and Gyeongsang provinces, and combined them to form Eco Green Holdings.
KKR gains a foothold in the South Korean infrastructure sector with the deal. The U.S. giant has recently been enhancing its South Korean team to expand investment in real asset as it diversifies beyond traditional corporate buyouts.
Citigroup Global Markets Korea Securities acted as deal adviser to Anchor Equity Partners. It has maintained a strong relationship, helping the firm to sell medical goods wholesaler Geo-Young in 2019 and health supplement company Health Balance this year.
Lazard Korea provided financial advice to KKR. Anchor Equity Partners and KKR received accounting and legal advice from KPMG and Kim & Chang respectively. (Reporting by Hee-yeon Han)