2020.04.08(수)

전체기사

STIC Investments to sell Daesung Eltec The PE firm will sell a 55.5 percent stake in the country's auto parts manufacturer

Translated by Kim So-in 공개 2020-02-19 08:00:18

이 기사는 2020년 02월 19일 08:00 더벨 유료페이지에 표출된 기사입니다.

South Korea’s private equity (PE) firm STIC Investments sells its portfolio company Daesung Eltec.

According to investment banking (IB) industry sources on February 14, STIC Investments has begun the process for selling the country’s auto parts manufacturer Daesung Eltec. The PE firm has started its marketing towards potential buyers via its lead manager Deloitte Anjin.

Up for sale is a 55.5 percent stake in Daesung Eltec, which STIC Investments owns through its third blind-pool fund. It is not known yet whether a 10.79 percent stake that Daesung Eltec’s president Park Sang-kyu owns will also be up for sale.

STIC Investments is planning to spend plenty of time looking for its potential buyer that meets the PE firm’s conditions. A specific timeline for the sale process has not been set yet. The sale process is expected to be kicked off in earnest once the PE firm drafts a long list of potential buyers.

“STIC Investments is approaching to strategic investors from various angles for the sale of Daesung Eltec. As it already selected its lead manager, the sale process will start as soon as the PE firm forms a list of potential buyers,” said an IB industry insider.

Established 40 years ago, the local parts manufacturer suffered financial difficulty, before STIC investments invested 37 billion won in the company in 2013 by issuing new shares and convertible bonds. Daesung Eltec’s financial performance has improved and the PE firm has particularly focused on boosting the company’s enterprise value by liquidating its IT business.

Successfully reorganized business portfolio and secured new capital, Daesung Eltec has put more efforts into original development manufacturing (ODM) and technical development. Daesung Eltec, which recorded sales of 318.7 billion won and an operating loss of 21.9 billion won in 2013, made a turnaround in 2014 and recorded sales of 366.7 billion won and an operating profit of 5.7 billion won in 2016.

Potential buyers are likely to include the nation’s conglomerates who seek to enhance its automotive electric system business and information & communication technology (ICT) companies who have interests in autonomous driving. Market watchers view that Daesung Eltec is quite competitive in the field of autonomous driving, considering the company worked for a national development project related to autonomous vehicle in 2017 and acquired advanced driver assistance system (ADAS) company Verasys in 2018. Market is also likely to pay attention to whether foreign major strategic investors who have interests in autonomous driving technology will participate in the deal.

What is notable is that Dasung Eltec’s financial performance is showing a sign of losing its bullish steam. The company’s earnings have worsened lately amid a slowing domestic automotive industry. Daesung Eltec’s sales have recorded a small decrease over the last few years and its earnings before interest, tax, depreciation and amortization (EBITDA) is also trending down.

(By reporter Choi Ik-hwan)
< 저작권자 ⓒ 자본시장 미디어 'thebell', 무단 전재 및 재배포 금지 >

더벨 서비스 문의

02-724-4104

유료 서비스 안내
(주)더벨
주소서울특별시 중구 무교로 6 (을지로 1가) 금세기빌딩 5층대표/발행인성화용편집인이진우등록번호서울아00483등록년월일2007.12.27 / 제호 : 더벨(thebell)
발행년월일2007.12.30청소년보호관리책임자이현중
문의TEL : 02-724-4100 / FAX : 02-724-4109서비스 문의 및 PC 초기화TEL : 02-724-4103기술 및 장애문의TEL : 02-724-4159

더벨의 모든 기사(콘텐트)는 저작권법의 보호를 받으며, 무단 전재 및 복사와 배포 등을 금지합니다.

copyright ⓒ thebell all rights reserved.