Global private equity (PE) firm KKR’s buyout fund has resumed investment activity after an absence of three years by acquiring a 38% stake in Hyundai Global Service for 646 billion won ($574 million) through a pre-initial public offering (IPO).
KKR signed a binding contract with Hyundai Heavy Industries Holdings (HHI Holdings) for the investment, industry sources said on Wednesday (February 24). The total deal size amounts to 800 billion won, as HHI Holdings will receive 150 billion won from Hyundai Global Service.
Hyundai Global Service provides maintenance and repair services for ships, with most demand coming from shipbuilding affiliates of the holding company. It posted a little over one trillion won in revenue in 2020, with an operating income of 157 billion won.
KKR has made its investment to support the company’s globalization by investing in its core business. It will be funded through the PE firm’s fourth KKR Asia Fund, worth $12.5 billion, and is the first investment by KKR in a Korean asset through the buyout fund since 2018, when it set up a partnership with LS Group.
This paved the way for KKR to buy LS Mtron’s copper foil and flexible copper-clad laminate businesses for 1.05 trillion won, and allowed the firm to set up a joint venture company with LS Mtron to own LS Automotive, an electrical auto parts maker.
LS Mtron’s copper foil and flexible copper clad laminate businesses were renamed KCFT and KKR eventually sold the company to SKC in June 2019 for 1.2 trillion won. Given that the PE firm had acquired KCFT for around 300 billion won, it really hit the jackpot with the investment, earning nearly 1 trillion won in just under 18 months.
Last year KKR acquired waste management company Eco Green Holdings from Anchor Equity Partners through its Asia Infra Fund, and also purchased a minority stake in TSK Corporation from SK Group.
KKR recently invested 50 billion won in South Korean e-commerce platform Tmon, together with Anchor Equity Partner, having first invested in the platform in 2015. (Reporting by Hee-yeon Han)