Private equity dealmaking in South Korea remained resilient in 2020 despite the financial fallout from the Covid-19 pandemic, fueled by interest in the waste management sector and a string of restructuring moves by conglomerates.

The value of mergers and acquisitions (M&A) completed in the past year dropped 6% year-on-year to 49.28 trillion won ($45.53 billion), according to data compiled by thebell. Private equity-backed deals totaled 25.48 billion won, accounting for 51.7% of the year’s deals by value, which was similar to 2019.

There were predictions earlier last year that the pandemic would freeze private equity (PE) investments and exits. However, activity by PE firms remained robust in South Korea largely due to increased deals involving waste management companies and businesses offloaded by large companies.

Investors focused on the growth potential and steady cash flows of the waste management sector. Anchor Equity Partners sold Eco Green Holdings to U.S. buyout firm KKR for 875 billion won in August, then Macquarie Korea Asset Management (MKAM) sold Koentec to construction company IS Dongseo for 500 billion won in September. Affirma Capital also closed the sale of EMC Holdings to SK Engineering & Construction for 1.05 trillion won in December.

There were also several notable PE deals where the seller was a conglomerate seeking to restructure a business. SkyLake Investment acquired a controlling stake in Doosan Solus, Doosan Group’s copper foil maker unit, for 699 billion won. Hahn & Co completed the 990 billion won purchase of Korean Air Line’s inflight catering business.

Such deals are likely to pick up in 2021, with more companies that were hit by the pandemic expected to sell all or part of their business. Observers expect that distressed and special situations strategies will become increasingly popular in the industry, which may lead to an increase in overall PE activity this year.

Several large transactions involving PE firms were also closed before the pandemic started. IMM Private Equity’s 730 billion sale of Tailim Packaging and Tailim Paper, MKAM’s 2.5 trillion won acquisition of Daesung Industrial Gases and Glenwood Private Equity’s 600 billion won purchase of SKC Kolon PI were all completed during the first quarter last year, adding to the value of deals in this category.

Meanwhile, South Korean corporations remained active in the M&A market as chief executives pursued transformative transactions. Notable strategic deals announced last year included Hyundai Motor Group’s takeover of Boston Dynamics, SK Hynix’s acquisition of Intel’s memory business and Korea Air Line’s merger of Asiana Airlines. (Reporting by Ar-rum Rho)