SK IE Technology (SK IET), a battery component subsidiary wholly owned by SK Innovation, has raised 300 billion won ($257 million) from private equity firm Premier Partners in a deal that valued the company at about 3 trillion won.

SK Innovation held a board meeting on Wednesday (September 23) to approve Premier Partners’ purchase of new shares issued by SK IET, a regulatory filing said. A deal is expected to be signed soon.

SK IET was founded last year after it was split off from SK Innovation, the energy and chemical unit of South Korean conglomerate SK Group. It is working on an initial public offering (IPO) with Mirae Asset Daewoo, JP Morgan, Korea Investment & Securities and Credit Suisse.

The company produces lithium-ion battery separators, one of the key components in lithium ion batteries used for smartphones and electric cars, and flexible cover windows used in the manufacturing of flexible displays. SK IET became the first South Korean company to independently develop lithium ion battery separator technology in 2004, and is expected to benefit from rising demand for electric vehicles.

SK Innovation has been stepping up efforts to raise cash to expand its investment in the battery business, which it believes will be the key driver of the company’s growth. A planned sale of a minority interest in SK Lubricants, another subsidiary of the company, is also part of this strategy, industry watchers said.

SK IET recorded revenues of 264 billion won and an operating income of 80.6 billion won in 2019. According to analyst estimates, the planned IPO could value the company as high as 5 trillion won. (Reporting by Hye-ran Kim)